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M 2d sSSSSr } COMMITTEE PRINT ,//"'"/"'" 



5- - 1*76 



ia DEC 

FOOD STAMP PROGRAM 



Staff Study 
by the 

COMMITTEE ON AGRICULTURE 
HOUSE OF REPRESENTATIVES 




Printed for the use of the Committee on Agriculture 



94th Congress 1 
2d Session / 



COMMITTEE PRINT 



FOOD STAMP PROGRAM 



Staff Study 
by the 

COMMITTEE ON AGRICULTURE 
HOUSE OP REPRESENTATIVES 



SEPTEMBER 1976 



Printed for the use of the Committee on Agriculture 



U.S. GOVERNMENT PRINTING OFFICE 
75-969 O WASHINGTON : 1976 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington, D.C. 20402 - Price $4.75 



COMMITTEE OX AGRICULTURE 



THOMAS S. FOLEY, Washington, Chairman 
W. R. POAGE, Texas, Vice Chairman 



E db la GARZA, Texas 

JOSEPH P. VIGORITO, Pennsylvania 

WALTER B. JONES, North Carolina 

ED JONES, Tennessee 

JOHN MELCHER, Montana 

DAWSON MATHIAS, Georgia 

BOB BERGLAND, Minnesota 

GEORGE E. BROWN, Jr.. California 

DAVID R. BOWEX. Mississippi 

CHARLES ROSE, North Carolina 

JOHN BRECKINRIDGE, Kentucky 

FREDERICK W. RICHMOND, New York 

RICHARD NOLAN, Minnesota 

JAMES WEAVER, Oregon 

ALVIN BALDUS. Wisconsin 

JOHN KREBS, California 

TOM HARKIN, Iowa 

JACK HIGHTOWER, Texas 

BERKLEY BEDELL, Iowa 

MATTHEW F. McHUGH, New York 

GLENN ENGLISH, Oklahoma 

FLOYD J. FITHIAN, Indiana 

JOHN W. JENRETTE, Jr., South Carolina 

RAY THORNTON, Arkansas 



WILLIAM C. WAMPLER, Virginia, 

Ranking Minority Member 
KEITH G. SEBELIUS, Kansas 
PAUL FINDLEY, Illinois 
CHARLES THONE, Nebraska 
STEVEN D. SYMMS, Idaho 
JAMES P. JOHNSON, Colorado 
EDWARD R. MADIGAN, Illinois 
PETER A. PEYSER, New York 
MARGARET M. HECKLER, Massachusetts 
JAMES M. JEFFORDS, Vermont 
RICHARD KELLY, Florida 
CHARLES E. GRASSLEY, Iowa 
TOM HAGEDORN, Minnesota 
W. HENSON MOORE, Louisiana 



Professional Staff 

Fowler C. West, Staff Director 
Robert M. Bor, Counsel 
Hyde H. Murray, Counsel 
John R. Kramer, Special Counsel 
L. T. Easley, Press Assistant 

Food Stamp Study Group Members 
Thomas S. Foley, Washington, Chairman 



E de la GARZA, Texas 
JOSEPH P. VIGORITO, Pennsylvania 
JOHN MELCHER, Montana 
DAWSON MATHIS, Georgia 
BOB BERGLAND, Minnesota 
GEORGE E. BROWN. Jr., California 
DAVID R. BOWEN, Mississippi 
CHARLES ROSE, North Carolina 



WILLIAM C. WAMPLER, Virginia, 

Ranking Minority Member 
.CHARLES THONE, Nebraska 
STEVEN D. SYMMS, Idaho 
JAMES M. JEFFORDS, Vermont 



Food Stamp Study Group Staff 

James Springfield, Study Director 

Sharon Armann Diane Keyser 

Roxana Burris David Wright 

Ann Cole Howard Yourman 

Steve Hoffman Wendell Primus, 

Mary Jarrett Study Group Consultant 



(II) 



FOREWORD 



Pursuant to House Resolutions 228 and 974, the House Committee 
on Agriculture was authorized $200,000 to carry out a comprehensive 
study of the Food Stamp program during 1975 and early 1976. In con- 
sidering food stamp legislation, the committee had been frustrated in 
its efforts to obtain basic factual information about the program, in- 
cluding such questions as who actually participates, what their finan- 
cial circumstances are, the problems associated with program admin- 
istration, the participation of special groups such as students, strikers, 
and high-income families, and how food stamp rules and regulations 
compared with similar means tested programs. 

Accordingly, the purpose of the study was to collect basic informa- 
tion about the operation of the program and the characteristics of food 
stamp recipients. An effort was made to identify those areas of greatest 
interest and concern and either develop or collect information which 
would help members of the committee better understand the nature 
of the problems so that legislative proposals could be considered in 
light of the best available information. 

Therefore, while the study material printed herein encompasses a 
number of subjects and issues related to the Food Stamp program ; the 
many complexities inherent in such an undertaking, as well as the avail- 
ability of resources, limited the scope of the study so that information 
on certain important aspects not included in this report, such as the nu- 
tritional focus of the Food Stamp program, have been obtained sep- 
arately by committee members. 

The findings of fact speak for themselves, although they may be 
interpreted so as to support different and varying conclusions. How- 
ever, the conclusions reached in this study were prepared by and are 
those of the committee staff. Therefore, it should be pointed out that 
wherever such conclusions are set forth in the study, they are not nec- 
essarily, and indeed may not be. those of the committee members. More- 
over, the members reserve the right to differ with the form and content 
of this study, either specifically or in its totality, if any facts or con- 
clusions contained in the study are said to be translated into, incor- 
porated within, or be supportive of. legislation considered by the 
Congress. 

Given the divergence of views of the members of this committee on 
the many difficult issues raised in the course of the Food Stamp study, 
no attempt was made to reach agreement on any conclusions nor was 
any attempt made to make recommendations, let alone to achieve unani- 
mous agreement on any conclusions or recommendations. Rather a 
study group composed of a cross section of the members of the com- 
mittee served in a supervisory capacity in guiding the work of com- 
mittee staff. The committee study group shaped the general outlines of 
the study, provided general guidance to the committee staff in the con- 

(m) 



duct of the study, and conducted general oversight over the work of 
the committee staff. 

It was intended that the study would provide a general repository of 
facts and knowledge uniquely prepared by and for the benefit of the 
committee members, the Members of the House, and the Congress 
generally. In addition, it was considered that the study would provide 
a cadre of informed committee staff personnel that would be available 
to the committee in the markup of committee food stamp bills. Thus, 
while the committee study does not contain extensive conclusions nor 
any recommendations, it is believed that the information provided by 
the study has been helpful in the committee consideration of the food 
stamp legislation reported by this committee. 

The committee wishes to acknowledge the assistance provided it by 
the General Accounting Office, the Department of Agriculture, the 
State and local welfare offices and the House information system's 
staff of the Committee on House Administration. 



CONTENTS 



Page 

Foreword HI 

Appendix I 

Processing Applications for Food Stamps : How Long Does It Take? 1 

Exchange of correspondence between Hon. Thomas S. Foley, chairman, 
Committee on Agriculture, and the Office of the Comptroller General 

of the United States 3 

Excerpt of report of the Comptroller General of the United States 

issued February 27, 1976 7 

Appendix II 

Survey of State and Local Welfare Administrators 37 

Letter from Hon. Thomas S. Foley, chairman, Committee on Agri- 
culture, soliciting information from State and local welfare admin- 
istrators 39 

Questionnaire forwarded to administrators 41 

Analysis of questionnaire responses 63 

Appendix III 

Quality Control Xon-Public Assistance Study 97 

Letter from Hon. Thomas S. Foley, chairman, Committee on Agricul- 
ture, soliciting information from all States, the District of Columbia, 

Puerto Rico, Guam, and the Virgin Islands 99 

Summary and conclusions of committee study of food stamp recipients. 101 

Appendix IV 

Student Participation in the Food Stamp Program 201 

Exchange of correspondence between Hon. Thomas S. Foley, chairman, 
Committee on Agriculture, and the Office of the Comptroller General 

of the United States 203 

Letters from Hon. Thomas S. Foley, chairman, Committee on Agricul- 
ture, soliciting information from universities 207 

Committee on Agriculture questionnaire on food stamps to universities. 211 
Letter from Hon. Thomas S. Foley, chairman, Committee on Agricul- 
ture, soliciting information from food stamp offices in university 

areas 243 

Committee on Agriculture questionnaire on food stamps to food stamp 

offices in university areas 245 

Memorandum from Hon. Thomas S. Foley, chairman, Committee on 
Agriculture, to members of committee on "Student Participation in 

the Food Stamp Program at Six Selected Universities" 255 

Attachment A — Analysis of college-focused questionnaire 259 

Attachment B — Analysis of food stamp office questionnaire 265 

Attachment C — Report of the Comptroller General of the United 
States to the Committee on Agriculture. April 29, 1976, on "Stu- 
dent Participation in the Food Stamp Program at Six Selected 
Universities" 271 

Appendix V 

Local Community Groups 303 

Letter from Hon. Thomas S. Foley, chairman, Committee on Agri- 
culture, soliciting information from local groups 305 

Questionnaire forwarded to community groups 307 

Analysis of questionnaire responses 327 

(V) 



Appendix VI 



Rationale for Criteria for Food Stamps, Aid to Families with Dependent 

Children, and Supplemental Security Income 367 

Exchange of correspondents beftween Hon. Thomas S. Foley, chairman, 
Committee on Agriculture and the Office of the Comptroller General 

of the United States 369 

Statement of Facts— GAO survey issued April 1976 375 

Appendix VII 

Survey of State Administrators on Quality Control Process 451 

Letter from Hon. Thomas S. Foley, chairman, Committee on Agricul- 
ture, soliciting additional information from administrators 463 

Questionnaire to collect additional information on quality control and 

illegal abuse 456 

Analysis of survey results 461 

Appendix VIII 

Illegal Activities in the Food Stamp Program — Federal Perspective 487 

Memorandum from Hon. Thomas S. Foley, chairman, Committee on 

Agriculture, to Members of the Committee 489 

Analysis of information supplied by vaj-ious offices and agencies 491 

Appendix IX 

Survey of State Administrators on Illegal Activities 547 

Letter from Hon. Thomas S. Foley, Chairman, Committee on Agri- 
culture, soliciting information on food stamp illegal activities from 

State administrators 549 

Committee on Agriculture questionnaire to State administrators on 

illegal activities 551 

Memorandum from Hon. Thomas S. Foley, chairman, to Members of 
Committee on Agriculture re "Survey of State Administrators on 

Illegal Activities" 559 

Attachment A — Analysis, Survey of State Administrators on 

Illegal Activities 561 



APPENDIX I 



Processing Applications for Food Stamps: 
How Long Does it Take?* 



A complete copy of this report is available from the 
the House Committee on Agriculture upon request. 



Digitized 


by the Internet Archive 




in 2013 





http://archive.org/details/cagricOOunit 



3 



THOMAS S. FOLEY. WASH.. 
CHAIRMAN 





E DC LA GARZA. TEX. 
JOSEPH r. VIOORITO. PA. 
WALTER O JOMU, M.C. 
ED JONEB. TENN. 
JOHN mi i c in k MONT. 
DAWSON MATHIS. OA. 
BOB BERGLAND, MINN. 
GEORGE E. BROWN. JR.. CALIF. 
DAVID R. BOWEN, MIBS. 
CHARLES ROSE. N.C 
JERRY LITTON. MO. 
JOHN BRECKINRIDGE. KY. 
FREDERICK W. RICHMOND, N.Y. 
RICHARD NOLAN, MINN. 
JAMES WEAVER. OREO. 
ALVIN BALDUS. WIS. 
JOHN KRESS. CAUF. 
TOM HARKIN. IOWA 
JACK HIGH TOWER, TEX. 
BERKLEY BEDELL. IOWA 
MATTHEW F. MC HUGH. N.Y. 
GLENN ENGLISH, OKLA. 
FLOYD J. F1THIAN, IND. 
JOHN W. JENRETTE. JR., B.C. 
NORMAN E, D-AMOURS. N.H. 



$ouae of fcepreaentatiijes 
Committee on agriculture 



Boom 1301. Uotigtoortfj frcuet fJXfict WuiItunB 



JSasfjington, B.C. 20515 



August 1, 1975 



JAMES M. JEFFORDS. VT. 
•KXUre KELLY. FLA. 
CHARLES E. ORASSLEY. IOWA 
TOM HAGEDORN. MINN. 




EDWARD R. MADIGAN. II I 
RETER A. PEYSER. N.Y. 
MARGARET M. HECKLER. MA SB. 






Dear Mr. Staats: 

In recent months there has been a growing concern over the 
inability of the States and local projects to interview and certify 
applicants, and to issue them food stamps in a timely manner. 
There have been increasingly common accounts of persons lining up in 
front of food stamp offices very early in the morning and still not 
being certified that day; of persons waiting three and four weeks 
before they could apply; and of persons having to return to food stamp 
offices repeatedly with additional documentation to verify eligibility. 
In recognition of these concerns, S. 1662 has passed the Senate and 
H.R. 7887 has been reported out of Committee by the House Committee on 
Agriculture. While these bills vary in detail, the intent is to insure 
that people receive food stamps within a reasonable time after they 
apply. They would require certification and issuance of food stamps 
on the same day a person makes his first reasonable attempt to apply 
for program benefits, and eligibility would be determined on the basis 
of information provided in the application. Verification of this 
information would be made subsequently. 

This Committee is quite concerned with the question of timely 
certification, as well as other aspects of the Food Stamp Program, 
and is taking steps to obtain information that will provide better under- 
standing of a variety of program problem areas. The purpose of this letter 
is to confirm an informal understanding reached by a member of the Committee 
staff and representatives of your office that the General Accounting Office 
as part of its review of the Food Stamp Program, will compile factual infor- 
mation on the timeliness of services provided to food stamp applicants in 
selected food project areas (including some in large metropolitan areas). 
This will involve primarily an analysis of actual recent cases to deter- 
mine the extent of, and reasons for, delays in interviewing and certifying 
applicants and providing them the opportunity to purchase food stamps. 



4 



As Sponsor of H.R. 7887, I am hopeful that it will be enacted 
into law. 1 believe the information available has demonstrated the 
need for this kind of emergency action. However, the action proposed is 
temporary in nature and therefore will need to be dealt with on a more 
permanent basis as the Committee looks at overall need for food stamp 
program revision. Also, if H.R. 7887, or something similar, is enacted 
into law, there is some concern that the certification procedures would 
result in increased program abuse. Therefore, it would be useful to 
have information soon after that procedure is implemented that would be 
helpful in assessing the extent of any additional program abuse. 

In the event that this pending legislation is not enacted, there 
will be continuing concern about problems of timely certification and 
issuance of food stamps. Therefore, information on the extent to which 
the problems persist during the coming months, and on the causes of the 
problems, will be very useful to the Committee. 

In addition, if information available at the food stamp offices 
permits, it would be very useful to have an assessment of the benefits 
that result from the verification procedures. I understand that in some 
offices recently visited by your representatives, certification arrange- 
ments were such that the verification procedure was not separable from 
the application procedure and could not be examined independently after 
an application was completed. If that turns out to be the case at offices 
your staff visits, determining the benefits from the verification require- 
ment may not be possible. However, I would appreciate any information in 
this area which you can provide. 

In line with the overall schedule on the study which the Committee 
has under way, I would appreciate a report on these matters no later 
than the end of December, 1975. If your staff have questions or need 
additional information, please have them contact Mr. James E. Springfield, 
whose telephone number is 225-2171. 

Thank you for your assistance. 

Sincerely, 



Thomas S. Foley 
Chairman 

The Honorable Elmer B. Staats 
Comptroller General of the United States 
441 G Street, N.W. 
Washington, D.C. 20548 



TSF: jsl 



5 




~ r £ -:-: r =:'e ~-zr&s S. r :"e.. 
Chai ran, f«illii on Agriculture 
-c.se : r 'ei'-rse'-.:-.- res 

!•= 2 r w r . I - 2 ' r -~.2 ' : 

Me -2 .e r -e ~ e ' , = : 

£-.2": 2:: " :2':s. .- 



end of December 1975. 



your letter of August 1, 1975, 




W- r- - - 



7 

REPORT OF THE 
COMPTROLLER GENERAL 
OF THE UNITED STATES 



Processing Applications For 

Food Stamps: 

How Long Does It Take? 

Food and Nutrition Service 
Department of Agriculture 

GAO reviewed 3,241 applications for food 
stamps in 16 projects in 7 states-California, 
Illinois, Indiana, Maryland, Michigan, Ohio, 
and Texas. About a third of the applications 
were processed within 7 days; over half were 
processed within 14 days; and more than 
three-fourths were processed within 30 days. 
Applicant delay in providing required 
documentation was the most important cause 
of increased processing times. 




I 

RED-76-74 



FEB. 27, 1976 



9 




COMPTROLLER GENERAL OF THE UNITED STATES 
WASHINGTON, D C. 2034* 



A-51604 

The Honorable Thomas S. Foley 
Chairman, Committee on Agriculture 
House of Representatives 

Dear Mr. Chairman: 

Pursuant to your August 1, 1975, request, we have re- 
viewed the processing of applications for food stamps and 
have compiled information on the speed of servicing food 
stamp applicants at selected locations. We obtained infor- 
mation on how applications were submitted and processed, how 
long the processing took, why processing took as long as it 
did, and the results of verifying information on the applica- 
tions. 

BACK GR OUND INFO RMATION AND 
SCOPE OF REVIEW 



The food stamp program, authorized by the Food Stamp Act 
of 1964, as amended (7 U.S.C. 2011), is designed to help low- 
income households obtain nutritionally adequate diets by sup- 
plementing their food budgets. The program is administered 
nationally by the Food and Nutrition Service, Department of 
Agriculture. State and county agencies administer the pro- 
gram locally. 

Under the program participating households buy food 
stamps with value greater than their purchase price and use 
them to buy food at authorized stores. The prices the par- 
ticipants pay for the stamps and the total values of stamps 
they receive are based on household size, income, and cer- 
tain expenses; extremely low-income households get food 
stamps free. Households in which all members receive public 
assistance (welfare) are automatically eligible to receive 
food stamps, but they pay for the stamps in proportion to 
their incomes. 

We conducted our review at 16 projects in 7 States. We 
selected the locations to obtain wide geographic coverage and 
to include large and small projects in both rural and urban 
areas. The information we compiled should be representative 
of circumstances in the 16 projects but may not be represent- 
ative of circumstances in other projects or other States. 
The 16 projects, the cities we visited, and the number of 
participants in each project as of September 1975 are shown 
below. 



10 



A-51604 







Par t ic i pants 


Cities 


1 # 




£ C "7 c /I "7 


Ch icago 


2 . 


Rnnnp Pruinl-v Tl 1 

DUUUC L U U I 1 Ly , 111 . 


^ n n 
D u u 


Bel v idere 


3 m 


nai iuii *^.vJUiiL.y, 1 1 1 u . 


t^n Q "7 


Indianapol is 


4 m 


ruL uct v„vJuiiLy , iiili . 


1 7 ^ £ 
1 , / D D 


Valparaiso 


5 . 


Hp 1 1 ac P n n n V \; fpov 

uaiiao Luun ty » lex. 


Q9 Aflft 


uaii as 


6 . 


Wayne v^vjunuy < niv.ii • 


9 m 4 11 


De t r o i t 


7 % 


n u 1 1 1 v_vjuiiuy, -lien. 


J , / 


Mon r oe 


8 . 


fnvahoaa Pnimfv Ohio 


i j j , j / 


Lieveiana 


9 # 


ncu ilia v,uuiity ^ uniu 


6f (Of 


Med i na 


10 . 


Baltimore (City), Md. 


166 ,737 


Ral f i mn r o 
Dul u liuuL t: 


11. 


Harford County, Md. 


5^518 


Bel Air 


12. 


Cecil County, Md. 


4 ,040 


Elkton 


13. 


San Francisco County, Calif. 


84,421 


San Francisco 


14. 


Alameda County, Calif. 


71,888 


Oakland 








Fremont 








Hayward 


15. 


Monterey County, Calif. 


15,330 


Sal inas 


16. 


El Dorado County, Calif. 


2,419 


Placerville 



The detailed data we compiled for each project is pre- 
sented as tables A through E of this report. The number 
listed for each project identifies the tables containing 
information for that project; for example, Cook County in- 
formation is in tables A-l through E-l. 

In each of the 8 large projects (over 50,000 partici- 
pants), we randomly selected for review about 250 completed 
new cases initiated about August 1975 and about 100 new cases 
pending with caseworkers 1/ at the times of our visits 
(October and November 1975). We generally visited five 
different food stamp offices in each large project. In each 
of the 8 small projects, we visited 1 office and randomly 
selected for review 50 completed new cases and 20 pending 
new cases, except where fewer than 20 cases were pending. 
We reviewed a total of 2,406 completed cases and 835 pending 
cases . 



1/There were no pending cases in Cuyahoga County. 



2 



A-51604 



11 



HOW APPLICATIONS WERE 
SUBMITTED AND PROCESSED 

Applicants initiate food stamp applications by calling 
or visiting local food stamp offices. Some of the projects 
we reviewed allowed individuals to walk in, submit applica- 
tions and/or be interviewed on a first-come-first-served 
basis, but most required or preferred appointments, espe- 
cially for interviews. Nearly all of the projects told the 
applicants before the interview which documents would be 
needed to verify information on the application. This was 
not usually possible for walk-in applicants. The information 
for which verifying documents are commonly required and the 
types of documents usually accepted are: 

Income — pay stubs; employer's statements; copies of 
checks . 

Mandatory deductions — tax withholding schedules; pay 
stubs. 

Resources — bank books and statements; vehicle re- 
gistrations; appraisal statements. 

Medical expenses — bills; receipts; statements. 

Child care expenses — statements from babysitters. 

Tuition — statements from educational institutions. 

Child support and alimony — copies of court decrees; 
statements from spouses. 

Shelter costs and proof of residence — mortgage and 
rent receipts; utility bills. 

After the key information on the applications was ver- 
ified, applications were approved or denied based on nation- 
wide eligibility standards, and bonuses — the difference be- 
tween the price of the stamps and their value — were deter- 
mined. For approved applications, authorizations to purchase 
food stamps were then issued each month and the participating 
households could use the authorizations to obtain their food 
stamp allotments. Authorizations to purchase food stamps were 
usually issued by computer, especially in the eight large 
projects. 



75-969 O - 76 - 2 



12 



A-51604 



Households with emergency needs for food stamps were 
given expedited service in the application processing. 

HOW LONG IT TOOK TO PROCESS APPLICATIONS 



About a third of the applications we reviewed were 
processed within 7 days and more than half were processed 
within 14 days. More than three- four ths of the cases were 
processed within 30 days. 

Some of the projects we reviewed did not have records 
showing the dates of applicants' initial contacts with the 
local food stamp offices, and, in those cases, the date 
the application was submitted was the earliest date in the 
records. Processing times are summarized below for the 
3,241 cases reviewed. Time frames are shown separately for 
the 1,683 cases for which the date of initial contact was 
available and for the 1,558 cases for which the date of 
application submission was used. 



Per cent of case s pr ocessed 
From initial From submission 
c ontact of a pplicatio n 



Within: 

7 days 33 42 

14 days 55 64 

21 days 71 77 

30 days 84 90 

Over 30 days 16 10 



Food and Nutrition Service regulations require applica- 
tions for food stamps to be approved or denied within 30 days 
of their submission, but additional time can elapse between 
an applicant's initial contact and the time the application 
is submitted, as well as between the application's approval 
and the issuance of the authorization to purchase food stamps. 
Where possible, our review took this additional time into 
account (see table below). Pending legislation (H.R. 7887) 
would require that applications be approved or denied before 
verifying key information, but would allow those projects 
issuing all of their authorizations within 30 days of the 
applicants' initial contacts to be exempted from this re- 
quirement . 



13 

A-51604 



Average processing times for applications are shown 



below 



Proc essi ng steps 

Initial contact to submission of 
an application 

Application submission to inter- 
view 

Interview to completion of 
ver if icat ion 

Completion of verification to 
approval or denial 

Approval of application to issuance 
of an authorization to purchase 
stamps 

Total process — from initial contact 



Average number of days 
Completed Pending 



Total process- 
application 



from submission of 



cases 
4.4 
1.8 
5.7 
1.2 

6.1 
16.9 

13.5 



5.7 
1.9 
13.4 
3.1 

21.2 
16.2 



In selecting pending cases for review, we generally did 
not include approved cases awaiting issuance of authoriza- 
tions to purchase food stamps. All cases appeared to be 
treated the same in that step and therefore, the time needed 
to complete that step would probably have been about the 
same for pending cases as it was for completed cases. For 
completed cases only, the issuance of authorizations was the 
longest step, especially in projects where this was done by 
computer; however, considering both completed and pending 
cases, verification of information was the longest step. 



In some cases authorizations to purchase food stamps 
were issued on the same day as the initial contact; however, 
processing sometimes took as long as 218 days for completed 
cases and 259 days for pending cases. 

Average processing time was much longer in the large 
projects — 16.6 days for completed cases and 20.4 days for 



14 



A-51604 



pending cases — than it was in the small projects — 8.8 days 
for completed cases and 13.1 days for pending cases. 

Tables A and B for each project show additional details 
on how long it took to process food stamp applications. 

WHY PROCESSING TOOK AS LONG AS IT DID 

For each case we reviewed taking longer than 7 days to 
process, we tried to determine what caused the processing 
to take as long as it did and the time associated with each 
cause. We assessed the overall importance of the different 
causes by considering the number of cases affected by each 
cause and the average length of processing time attributable 
to that cause. 

Applicant failure to furnish, or to promptly furnish, 
required documentation was the most important cause of appli- 
cation processing delays. Other reasons for delays, in order 
of their importance, were (1) work backlogs due to large 
numbers of applicants, (2) problems with comouter processing 
and issuance of authorizations to purchase food stamps, (3) 
suspension of authorization issuances during the last week 
of each month' because there would not be adequate time for 
applicants to obtain stamps for that month, and (4) resched- 
uling interviews for applicants' convenience. 

Additional detail on reasons for delays in processing 
applications is contained in the enclosed summaries of work 
results and in table C for each project. Workload data is 
shown in table D for each project. 

BENEFITS RESU LT ING FRO M- VERIFICATIO N 

For each of the completed cases reviewed, except for 
87 public assistance cases in Alameda County, California, we 
attempted to determine the benefits resulting from verifica- 
tion; that is, whether verifying key information on the 
application resulted in a monthly food stamp bonus that was 
different than what it would have been had the information 
not been verified. The number of cases in which we could 
determine the results of verification and the amount of change 
in the monthly bonus are shown in table E for each project 
and are summarized below. 



15 



A-51604 



Cases 



Change in monthly 
bonus 



Results determinable: 

Benefits to the Government 
Benefits to the recipient 
Benefits unchanged 



410 
162 
826 



$20 ,027 
5 ,030 



Subtotal 



1,398 



Results not determinable 



921 



Total 



2^319 



In many cases we were unable to determine results from 
verification because the records did not show unverified 
information or did not distinguish between verified and 
unverified information. The changes in food stamp bonuses 
because of verification were due primarily to understate- 
ment of household income and overstatement of shelter ex- 
pense . 

We also asked local officials about their experiences 
and views on approval of applications before verification. 
All those expressing views on the subject believed that 
such a policy would lead to widespread errors in food stamp 
bonuses and to ineligible households receiving stamps. 



In accordance with instructions from your office, this 
report has not been reviewed by Federal, State, or local 
officials responsible for the activities discussed,. 




Comptroller General 
of the United States 



16 



Contents 



Pag^e 



APPENDIX 
I 

II 
III 



IV 



TABLE 

A-l to A-16 
B-l to B-16 
C-l to C-16 
D-l to D-16 
E-l to E-16 



Summary of results 

Cook and Boone Counties, Illinois, 
Marion and Porter Counties, 
Indiana 

Summary of results 
Dallas County, Texas 

Summary of results 

Monroe and Wayne Counties, Michigan, 
Cuyahoga and Medina Counties, Ohio 

Summary of results 

Baltimore City and Harford and 
Cecil Counties, Maryland 

Summary of results 

Alameda, El Dorado, Monterey, 
and San Francisco Counties, 
Cal if ornia 



13 



18 



Summary of completed and pending 

cases taking over 7 days 21 

Time spent in major processing 

steps 45 

Major causes of delays in processing 

applications 68 

Total workload from January to 

October 1975 84 

Changes in bonus dollars resulting 
from verifying information fur- 
nished by applicants 100 



17 



APPENDIX I APPENDIX I 



SUMMARY OF RESULTS 

COOK AND BOONE COUNTIES, ILLINOIS, 

MARION AND PORTER COUNTIES, INDIANA 

We visited 12 offices serving 4 project areas in 
Illinois and Indiana — 1 office each in Belvidere (Boone 
County), Illinois and Valparaiso (Porter County), Indiana; 
and 5 each in Chicago (Cook County) and Indianapolis (Marion 
County). We reviewed 835 randomly selected case files. 

HOW APPLICATIONS WERE SUBMITTED AND 
PROCESSED AT LOCATIONS VISITED 

All of the offices told applicants in advance what 
supporting records they would need to establish eligibility. 
The Illinois offices also screened applicants to establish 
their potential eligibility and their immediate need for 
assistance. All of the offices used an appointment system 
to accept applications and interview applicants, but they 
provided immediate service for emergencies. In addition, 
the central Marion County office, which handled a majority 
of the county's applicants, routinely interviewed walk-in 
appl icants. 

All of the offices urged applicants to complete their 
application before the interview, except in Marion County 
where the interviewers usually prepared the complete ap- 
plication. 

The Illinois offices manually issued authorizations 
to purchase food stamps for the first month and the State's 
central computer issued the recurring authorizations. In 
Indiana, Marion County printed authorizations with its own 
computerized system. For Porter County, the State issued 
authorizations through its centralized computer system for 
new applicants approved during the first half of the month. 

HOW LONG IT TOOK TO PROCESS APPLICATIONS 

Processing took over 7 days in about 65 percent of 
the 835 cases reviewed. Processing times for the projects 
are summarized below. 



18 



APPENDIX I 



APPENDIX I 



Complete d ca ses 



Pen ding cases 



Project area 
( county) 



Cases 



Average Range Cases 
(number of days) 



Aver a^e Range; 
(number of days) 



Boone 
Cook 
Mar ion 
Porter 



50 
250 
250 

50 



7.7 to 19 

24.9 to 122 

10.4 to 32 

13.1 7 to 37 



20 
100 
100 

15 



3.0 
28 .1 
18.4 
24.3 



to 16 

to 109 

1 to 30 
11 to 37 



Of the 600 completed cases we reviewed in the 4 projects, 
88 percent of the applications were either denied or had the 
authorizations issued within 30 days of the applicants' 
initial contact with local food stamp offices. Detailed in- 
formation on processing times is contained in tables A-l 
through A-4 and B-l through B-4. 

In completed cases a major portion of the processing 
time was between the applicants 1 initial contacts with the 
welfare agency and the day they submitted applications 
(6.8 days for Boone County and 7.7 days for Cook County). 
Another time-consuming phase was from application approval 
to issuance of authorization to purchase (3.7 days in Porter 
County and 11.1 days in Cook County). For pending cases 
the time between the interview and completion of verifica- 
tion seemed long (18.4 days in Marion County and 17.3 days 
in Porter County). In Porter County an additional delay 
frequently occurred because the issued authorizations were 
not mailed and the applicants were not notified that the 
authorizations were ready for pickup. 

WHY PROCESSING TOOK AS LONG AS IT DID 



The applicant's failure to furnish, or delays in 
furnishing, required records was a frequent cause of delays 
and resulted in the longest average number of days delay. 
A major factor contributing to the length of these delays in 
Cook County was that the county allowed applications to re- 
main pending instead of denying them when the applicant did 
not provide required records after a certain length of time. 

The interviewers' workload was a major and frequent 
cause of delay in Cook, Boone, and Porter Counties. On ap- 
proved cases, the clerical workload and procedures were 
major causes of delays in Cook and Marion Counties. Inex- 
perienced staff and heavy workloads also caused delays in 
supervisors' processing of cases in Marion County. 

Sharp increases in food stamp applications caused work- 
load problems and extended processing times in the Illinois 



2 



APPENDIX I 



19 



APPENDIX I 



offices. During this same time period, there were also back- 
logs of applications for public assistance, and it was the 
practice to give priority to processing public assistance 
cases by shifting staff. The large workload in Cook County 
at the end of September 1975 (see table D-l) was the result, 
at lea?t in part, of strikes and the shifting of priorities 
betweeen the food stamp and public assistance workloads. 

The States' centralized computer systems for issuing 
authorizations were major sources of delays in some cases. 
Although Porter County could have issued its authorizations 
manually the same day that applicants were approved, it was 
prevented from doing so by State procedural requirements. 
The computerized system in Marion County also caused delays 
in issuing authorizations because it did not process authori- 
zations after a certain date each month. Additional detail 
on the reasons for delays is presented in tables C-l through 
C-4 while tables D-l through D-4 present workload data for 
January to October 1975. 



BENEFITS RESULTING FROM VERIFICATION 



We reviewed the completed cases at each office to 
determine whether verification of applications resulted in 
decreases or increases in the monthly bonus value of stamps 
to be issued to applicants. The results of our review for 
the four counties are shown in detail in tables E-l through 
E-4 and are summarized below. 



Illinois Indiana _ Total_ 

Change " Change Change 

in in in 

monthly monthly monthly 

Cases bonus Cases bo nus Cases bonus 

Results deter- 
minable: 

Benefits to the 

Government 
Benefits to the 

recipient 
Benefits un- 
changed 

Subtotal 



52 $1,862 
12 237 

214 



6 
2 
55 
63 



$227 
103 



58 $2,089 
14 340 

205 

277 



Results not 

determinable 86 237 323 

Total 300 300 600 



3 



20 

APPENDIX I APPENDIX I 



About 90 percent of the $2,089 decrease in applicants' 
monthly bonus value was due either to an understatement of 
income (51.2 percent), particularly wages and salaries, or to 
an overstatement of shelter and child care expenses (38.4 per- 
cent). In those cases in which verification results were 
not determinable, it was generally because the records did not 
distinguish between verified and unverified information or 
did not show unverified information. 



4 



21 

APPENDIX II APPENDIX II 



SUMMARY OF RESULTS 

DALLAS COUNTY, TEXAS 

We visited 5 offices serving the Dallas County project 
area and reviewed 350 randomly selected case files. 

HO W APPLI CATIONS WERE SUB MITTED AN D 
PROCESSED AT LOCATIONS VISITED 

Applications for food stamps could be obtained by 
telephone request, mail, or in person at any of the five 
food stamp offices visited. Upon receipt of a signed appli- 
cation, an interview was scheduled and the applicant was 
told what information and documents would be needed. 

Under new procedures established on a trial basis 
during our review, the caseworker attemped to verify appli- 
cation information during an interview in the apolicant's 
home. In many instances, however, the applicant did not 
have the required documentation on hand and further pro- 
cessing of the case was delayed until the applicant brought 
the information to the food stamp office. 

If the application was approved, the applicant and the 
State welfare department's computer center were notified. 
The computer center issued the authorization to purchase 
food stamps and mailed it to the applicant. 

"Emergency" applicants — persons who did not have the 
food or money to survive for 7 days — were interviewed in 
their homes on the same day or the day after they came to 
the food stamp office and completed an application. If 
the emergency applicant could provide the required documen- 
tation to prove his eligibility, he was manually issued an 
authorization in 4 to 24 hours. 

"Semi-emergency" applicants — persons who had re- 
sources to last 7 days, but not enough to last through the 
normal 30-day processing period — also received immediate 
home interviews. After proof of eligibility was estab- 
lished and the application was processed and approved, the 
authorization was issued by the State welfare computer 
center within 7 days. 

HOW LONG IT TOOK TO PROCESS APPLICATIONS 

Processing took over 7 days in about 92 percent of 
350 cases reviewed in Dallas County. The processing times 



5 



22 

APPENDIX II APPENDIX II 



for completed and pending cases are summarized below and 
are presented in more detail in tables A-5 and B-5. 

Completed cases Pending cases _ 

Project area 

( county ) Cases Average R ang e Cases Average Range 

(number of days) (number of days) 

Dallas 250 22.6 to 87 100 29.3 1 to 78 

For the 250 completed cases reviewed, 77 percent of the 
applications were denied or had authorizations to purchase 
stamps issued within 30 days of the applicants' initial con- 
tacts with local food stamp offices. 



The longest step in the application process for both 
completed and pending cases (see table B-5) was the time 
between application submission and the interview (9.4 days 
for completed cases and 15.0 days for pending cases). The 
second longest interval for both completed and pending cases 
occurred between the interview and completion of verification 
(5.5 days for completed cases and 9.4 days for pending cases). 

WHY PROCESSING TOOK AS LONG AS IT DID 

The interview delays affecting completed cases were 
caused by a temporary decrease in the number of food stamp 
caseworkers assigned to application processing. The inter- 
view delays for pending cases were caused by this same de- 
crease in staff and also by a decline in caseworker produc- 
tivity due to a change in processing procedure. 

During the period the cases we reviewed were in process, 
the State welfare department operated under a job freeze and 
several food stamp caseworkers were temporarily loaned to a 
fraud investigation unit. In addition, during the period 
the pending cases were in process, the home interview pro- 
gram was initiated on a trial basis. 

Caseworkers could usually schedule eight office inter- 
views per day but could usually schedule only four to five 
new home visits daily. These schedules were further re- 
duced if applicants did not keep their home appointments. 
The decline in staff and initiation of the home interview 
program, however, did not affect an office's ability to 
respond to the needs of emergency and semi-emergency ap- 
pl icants . 



6 



23 

APPENDIX II APPENDIX II 



Applicant failure to furnish, or delay in furnishing, 
supporting documentation was the major cause of verification 
delay. Forty-five cases taking more than 7 days to complete 
were delayed an average of 18.4 days while caseworkers waited 
for receipt of supporting documentation from applicants. 
Fifteen applications pending more than 1 week were delayed 
an average of 15.2 days for this reason. 

Other reasons for processing delays included (1) 
applicants not returning completed applications promptly, 

(2) interview rescheduling for applicants' convenience, and 

(3) computer delays or errors. Additional detail on the 
reasons for delays is presented in table C-5. 



The workload at the 5 offices from January through 
September 1975 averaged 8,137 new applications, reapplica- 
tions, and recertif ications, ranging from a low of 6,633 
cases in August to a high of 10,225 cases in March (see 
table D-5). The pending caseload remained relatively con- 
stant during this period. As the workload varied between 
the five offices, staff was shifted to meet peak demands. 

BENEFITS RESULTING FROM VERIFICATION 



We reviewed the completed cases at the five offices 
to determine whether verification of applications resulted 
in decreases or increases in the bonus value of stamps to 
be issued to applicants. The results of our review for 
Dallas County are shown in table E-5 and are summarized 
below. 



Change in monthly 
Cases b onus 

Results determinable: 
Benefits to the 

Government 112 $6,699 

Benefits to the 

recipient 45 1,447 

Benefits unchanged 66 

Subtotal 223 

Results not determinable 27 

Total 250 

During our review, local food stamp officials gave us 
an illustration of the abuse that could result from "in- 
stant certification" of applicants with later verification 
of application data. In 1974 these officials entered into 



24 



APPENDIX II APPENDIX II 



an agreement with the Dallas County Welfare Department 
under which all referrals from the welfare department were 
certified for food stamps and the food stamp bonus was 
calculated without verification. In return, Dallas County 
agreed to reimburse the food stamp program if overpayments 
occurred. In the period from April 1974 to July 1975, 407 
referrals involving $53,515 in bonus stamps were accepted 
without prior investigation or verification. Subsequent 
verification by food stamp personnel disclosed that un- 
reported applicant income caused 108 over issuances totaling 
$4,994. Dallas County reimbursed the Department of Agricul- 
ture for these overpayments. 



8 



25 

APPENDIX III APPENDIX III 



SUMMARY OF RESULTS 

MONROE AND WAYNE COUNTIES, MICHIGAN 

CUYAHOGA AND MEDINA COUNTIES, OHIO 

We visited 12 offices serving 4 project areas in Michigan 
and Ohio — 1 office each in Monroe County, Michigan, and Medina 
County, Ohio, and 5 offices each in Detroit (Wayne County) 
and Cleveland (Cuyahoga County). We reviewed 741 case files 
selected at random. 

HOW APPLICATIONS WERE SU BMIT T ED AND 
PROCESSED AT LOCATIONS VISITED 

Food stamp applicants in Cuyahoga, Medina, and Monroe 
Counties could obtain an interview by appointment or on a 
walk-in basis. If time permitted, walk-in applicants were 
interviewed the same day. Interview appointments were en- 
couraged, however, and were used by most of the applicants 
in these three counties. Medina and Monroe Counties sent 
packets of information, describing the documents needed to 
establish eligibility, to persons making appointments; 
Cuyahoga County told persons who telephoned what was needed 
and gave a check list to walk-ins. 

Wayne County accepted applications only on a walk-in, 
first-come-first-served basis. Three of the five Wayne 
County offices we visited had established quotas for the 
minimum number of interviews each caseworker would conduct 
each day. Applicants who would have been in excess of the 
quotas were advised that they might not be interviewed that 
day and that they might wish to try again another day. 
Wayne County applicants were generally not told in advance 
what documents to bring, and much of the key information 
needed was not entered on the applications until documenta- 
tion was supplied. 

In all four counties the information reported on the 
applications was verified to source documents supplied by 
the applicant. In the smaller counties of Medina and Monroe, 
certification workers occasionally confirmed employment data 
by telephone when applicants were unable to provide docu- 
mentary support for income. 

Applicants who did not bring required documents to the 
first interview were handled differently in each of the four 



9 



26 



APPENDIX III . APPENDIX III 



project areas. Cuyahoga County denied the applications and 
when applicants returned, a new application was prepared. 
In Wayne County, applications were held in a pending status 
while the applicant obtained additional documentation and 
returned for a second interview. Returning applicants were 
interviewed on a first-come-first-served basis with other 
applicants. In Monroe County, applications were held in a 
pending status and the applicant was given interview priority 
when returning with additional documentation. In Medina 
County, applications were held in a pending status and the 
subsequent interview was scheduled by appointment. 

The Michigan offices manually issued the initial author- 
izations to purchase food stamps and county computers issued 
later authorizations. Cuyahoga County issued all author- 
izations by computer except in cases of emergency, while 
Medina County issued all of their authorizations manually. 

HOW LONG IT TOOK TO PROCESS APPLICATIONS 



Processing took over 7 days; in 46 percent of the 741 
cases reviewed. Of the 600 completed cases we reviewed, 
approximately 94 percent of the applications were denied 
or authorizations to purchase were issued within 30 days of 
the applicants' initial contacts with local food stamp offices. 
The total processing time is understated for Wayne, Cuyahoga, 
and Medina Counties because records of initial contacts were 
not kept. Processing times for the project areas are sum- 
marized below. 



Project area 


Completed cases 


Pending cases 


(county) 


Cases 


Average Range 


Cases 


Aver age Range 






(number of days) 




(number of days) 


Cuyahoga 


250 


8 to 39 






Medina 


50 


4 to 31 


20 


12 to 29 


Monroe 


50 


7 to 30 


21 


20 6 to 47 


Wayne 


250 


12 to 218 


100 


15 to 69 



Detailed information on processing times is contained in 
tables A-6 through A-9 and B-6 through B-9. Cuyahoga County 
had no pending cases because it denied applications if all 
documentation was not supplied at the interview. While it 
appears from table B-8 that Cuyahoga County did not incur 
delays in verifying applications, the time interval between 
applications by the same applicant could be considered 



10 



27 

APPENDIX III APPENDIX III 



verification delays. We did not obtain information on how 
long such intervals were. At 1 Cuyahoga County office, ap- 
plicants in 13 of the 75 cases reviewed had to reapply at 
least once to be approved. 

In both completed and pending cases for all four counties, 
the major processing delay occurred in verifying information 
reported on the application. Also, in Wayne, Cuyahoga, and 
Medina Counties, delays occurred in issuing food stamp author- 
izations. (See tables B-6 through B-9.) 

WHY PROCESSING TOOK AS LONG AS IT DID 



Delays in verification occurred because applicants did 
not bring the necessary supporting documentation to their 
first interview. In Monroe, Cuyahoga, and Medina Counties, 
some applicants neglected to bring the required documenta- 
tion, even when told what documents to bring. Wayne County 
interviews were held on a first-come-first-served basis 
and applicants were generally not told in advance what docu- 
ments to bring. 

Delays in issuing intitial authorizations to purchase 
stamps occurred in one Wayne County office because food stamp 
certification workers did not issue authorizations manually 
as required. Computer processing of authorizations caused de- 
lays in Cuyahoga County. Tables C-6 through C-9 provide addi- 
tional detail on reasons for delays while tables D-6 through 
D-9 present workload data from January to September 1975. 

BENEFITS RESULTING FROM VERIFICATION 



We reviewed the completed cases at each office to deter- 
mine whether verification of applications during initial pro- 
cessing resulted in changes in the monthly bonus value of 
stamps to be issued to applicants. In Wayne and Monroe 
Counties, however, we were unable to determine the benefits 
resulting from verification because the records did not in- 
clude unverified information. 

The results of our review for Cuyahoga and Medina Counties 

where we were able to determine the benefits resulting from 

verification are shown in detail in tables E-8 and E-9 and are 
summarized below. 



11 



76-969 O - 76 - 3 



28 



APPENDIX III 



APPENDIX III 



Cases 



Change in 
monthly bonus 



Results determinable: 

Benefits to the Government 
Benefits to the recipient 
Benefits unchanged 



98 
42 
160 



$5,622 
1 ,832 



Subtotal 



300 



Results not determinable 



300 



Total 



600 



In Cuyahoga County we were able to categorize results 
by verification item (see table E-8 ) . Verification of 
earned income and shelter expenses accounted for about 55 
percent of the benefit changes. 

Food stamp officials in all four counties opposed "in- 
stant certification" of applicants with later verification of 
application data. They cited (1) the inadequacy of the size 
of the present staff to handle the anticipated increase in 
the number of applications, (2) the probability that a back- 
log of cases pending verification would develop, and (3) a 
likely increase in the number of fraudulent applications 
filed. Wayne County food stamp officials said that their 
welfare department had recently experimented with "presumptive 
eligibility" for aid to families with dependent children 
applicants. According to these officials, presumptive eligi- 
bility resulted in a large number of fraudulent applications 
being filed, and they believed instant certification would 
produce a similar result in the food stamp program. 



12 



29 

APPENDIX IV APPENDIX IV 



SUMMARY OF RESULTS 

BALTIMORE CITY AND HARFORD 

AND CECIL COUNTIES, MARYLAND 

We visited seven offices serving three project areas in 
Maryland — one office each in Harford and Cecil Counties and 
five offices in the City of Baltimore. We reviewed a total 
of 488 randomly selected case files. 

HOW APPLICATIONS WERE SUBMITTED AND PROCESSED 
AT LOCATIONS VISITED 

Upon contacting local food stamp offices, applicants 
were told when their interviews would be held and what 
documentation was needed to verify applications. Three 
Baltimore offices and the Cecil County office scheduled 
interviews either by appointment or on a walk-in basis; 
two Baltimore offices and the Harford County office sched- 
uled interviews by appointment only. In six of the seven 
offices, the applicant filled out the application which was 
reviewed and verified by a caseworker. In Cecil County the 
application was filled out by the caseworker during the 
interview. 

If, as normally happened, an applicant did not bring 
all the necessary documentation to the interview, he was 
given a list of the items needed and was asked to supply 
them within 15 days. Each applicant also was checked 
through a master file to determine whether he was receiving 
or had received food stamps. After all documentation was 
received and the master file clearance completed, the 
caseworker determined whether the applicant was eligible 
for food stamps. The caseworker then notified the appli- 
cant of the decision and, for those found eligible, pre- 
pared an approval document. 

After the approval document was prepared, the pro- 
cedures followed by the three project areas varied. In 
Baltimore, the five offices sent the approval documents to 
a central edit and control section for a check on accuracy 
and completeness. From there the approval documents were 
sent to an automatic data processing section where authori- 
zations to purchase were printed. The authorizations were 
then sent to another location for mailing to the applicants. 

In Harford County, the project office used the ap- 
proval documents to type initial authorizations to purchase, 



13 



30 



APPENDIX IV 



APPENDIX IV 



valid for the first month. These were then mailed to the 
applicants. For later months, the authorizations were 
printed by a county computer. Authorizations to purchase 
were not used in Cecil County. Instead, the approval 
documents were sent to a central issuance office where 
participants signed issuance cards each time they obtained 
food stamps. 

In all three project areas, caseworkers attempted 
to expedite processing of applications for persons in an 
emergency situation. The same steps were followed as for 
normal applications, but the processing times between steps 
were reduced whenever possible. 

HOW LONG IT TOOK TO PROCESS APPLICATIONS 



Seventy-seven percent of the 488 cases we reviewed 
took more than 7 days to process. Processing times for the 
three projects are summarized below. 



Proje ct a rea 



Completed ca ses Pe ndi ng cases 

Cases Average Range Cases Average Rang_e 
(number of days) (number of days) 



Baltimore City 251 27.6 to 75 97 
Cecil County 50 7.6 to 43 15 

Harford County 55 16.2 to 62 20 



20 



23 



2 1 to 259 
4 to 30 
1 to 69 



For the 356 completed cases we reviewed in the 3 project 
areas, 73 percent of the applications were denied or authori- 
zations to purchase food stamps were issued within 30 days 
of the applicants' initial contact with local food stamp 
offices. Detailed information on processing times for these 
projects is contained in tables A-10 through A-12 and B-10 
through B-12. 



The interval between interview and completion of 
verification provided the most frequent delay. In addition, 
a lengthy processing step in Baltimore was between applica- 
tion approval and issuance of authorizations to purchase 
food stamps. 

The time between initial contact and application 
submission (usually at the interview) averaged 11.0 days 
in Harford County and 1.2 days in Cecil County. Complete 
data on this processing step was not available in Baltimore, 
but local officials estimated that the wait for an inter- 
view ranged from 1 to 21 days. 



14 



31 



APPENDIX IV APPENDIX IV 



WHY PROCESSING TOOK AS LONG AS IT DID 

Applicant failure to furnish, or delay in furnishing, 
supporting documentation was the most important cause of 
verification delay. We found that applicants had the most 
difficulty in substantiating salaries and wages, social 
security and unemployment entitlements, and shelter and 
medical expenses. In Baltimore another major cause of 
verification delay was the master file clearance. This 
process — which involved filling out a clearance request, 
transmitting the request by courier to a central office, 
and manually checking client history cards — accounted for 
about half of the 16.2 days between the interview and veri- 
fication completion. Master files in Cecil and Harford 
Counties were located in the food stamp offices, and the 
clearance process was completed in 1 day or less. 

Baltimore's delay in issuing authorizations to 
purchase stamps was caused by the time consumed in data 
processing procedures and in the movement of approval docu- 
ments and authorizations. This delay was also affected 
by Baltimore's practice of not initiating the processing 
of authorizations after a "cutoff day" (generally 4 to 5 
working days before the end of the month) because the ap- 
plicant would probably not receive the authorizations in 
time to purchase food stamps before the end of the month. 
Cecil and Harford Counties issued the current month's food 
stamp allotment even if the initial request was made on 
the last working day of the month. 

Harford County's delay in holding interviews occurred 
because of a workload backlog. Tables C-10 through C-12 
provide additional detail on reasons for delays in the three 
project areas. 

It appeared that the size of Baltimore's total 
caseload and its procedures increased processing time. For 
example, the requirement that all Baltimore applications 
be funneled into two centers (master file and data pro- 
cessing) added to processing time. 

Cecil County applicants received food stamps quicker 
than applicants in any of the five Baltimore offices al- 
though Cecil County had a higher nonpublic assistance 
caseload per caseworker. Data was not available for 
public assistance cases receiving food stamps. We did 
not analyze Harford County's workload per caseworker be- 
cause of inaccuracies in caseload data. It appeared that 
Cecil County casewokers were able to process more applica- 
tions because: 



15 



32 



APPENDIX IV 



APPENDIX IV 



— Applicants were quicker in supplying additional 
documentation . 

— Supporting documentation was easier to obtain. Legal 
documents were available in the same building as the 
food stamp office and quick service for social secur- 
ity and unemployment conpensation information was 
available at nearby offices. 

— Master file clearance was obtained in less than half 
a day. 

— Caseworkers appeared to have less outside inter- 
ruptions while processing applications. 

— Interviewers spent less time taking applications. 
This shorter period may have been due to the inter- 
viewer, rather than the applicant, filling out the 
application form. 

Additional detail on workloads for these projects is 
shown on tables D-10 through D-12. 

BENEFITS RESULTING FROM VERIFICATION 



We reviewed the completed cases at each office to 
determine whether verification of applications resulted 
in changes in bonus value of stamps to be issued to ap- 
plicants. The results of our review for the three project 
areas are shown in tables E-10 through E-12 and are sum- 
marized below. 



Cases 



Change in 
monthly bonus 



Results determinable: 

Benefits to the Govern- 



ment 

Benefits to the recipient 
Benefits unchanged 



21 
10 
101 



$824 
247 



Subtotal 



132 



Results not determinable 



224 



Total 



356 



16 



33 

APPENDIX IV APPENDIX IV 



Overstatement or understatement of applicant income 
caused approximately two-thirds of the total change in bonus 
dollars. In most cases, however, verification results were 
not determinable because the records either did not dis- 
tinguish between verified and unverified information or did 
not show unverified information. 



17 



34 

APPENDIX V APPENDIX V 



SUMMARY OF RESULTS 

ALAMEDA, EL DORADO, MONTEREY, AND 

SAN FRANCISCO COUNTIES, CALIFORNIA 

In California we conducted our review in five offices in 
Alameda County and in one office each in San Francisco, 
Monterey, and El Dorado Counties. San Francisco County had 
only one office handling nonpublic assistance cases. Al- 
together, we reviewed 827 case files generally selected at 
random, including 112 public assistance cases in Alameda 
County. Work in Alameda County was concentrated in the urban 
area of Oakland. 

HOW APPLICATIONS WERE SUBMITTED AND 
PROCESSED AT LOCATION S VISIT ED 

Three of the four project areas we visited in California 
accepted applicants by appointment only, except for emergency 
cases. Prior to their appointments, individuals were pro- 
vided application forms and lists of needed supporting docu- 
ments. In Monterey's walk-in system, however, aoplicants 
were interviewed on the day of their initial contact if 
poss ible . 

Applications with incomplete supporting documentation were 
held until the needed documentation was provided. On a few 
occasions, San Francisco, Monterey, and El Dorado accepted 
applicants' undocumented statements if the statements appeared 
reasonable to the caseworker, but such applications were 
approved for only 1 month. 

Authorizations to purchase food stamps were prepared 
mechanically by each county's data processing center and sent 
to the local welfare office or fiscal department for final 
processing and mailing to the applicant. All four counties 
had provisions, including manual preparation of the author- 
izations if necessary, for expediting emergency cases. Also, 
all four counties had special procedures for issuing food 
stamps, such as over-the-counter sales and sales by mail. 

HOW LONG IT TOOK TO PROCESS APPLICATIONS 



Sixty-two percent of the 715 food stamp cases reviewed 
which did not involve public assistance recipients took 
longer than 7 days to process. Monterey County, however, 



35 

APPENDIX V APPENDIX V 



processed all of the 50 completed cases reviewed in less than 
7 days. Processing times are summarized below for the four 
California project areas and are presented in detail in tables 
A-13 through A-16 and B-13 through B-16. 



Project area Completed cases Pending cases 

(_cquntyj Cases Average Range Cases Average Range 

(number of days) (number of days) 

Alameda 163 25.1 2 to 113 75 28.9 4 to 92 

El Dorado 50 12.4 to 52 5 11.4 1 to 18 

Monterey 50 1.7 to 6 22 3.8 to 14 

San Francisco 250 8.5 to 52 100 9.8 to 33 



Public assistance recipients are automatically eligible 
for food stamps. In Alameda County we reviewed 87 completed 
and 25 pending public assistance cases because their process- 
ing frequently took longer than 7 days. In the 87 completed 
public assistance cases we reviewed, the average time for 
processing the food stamp applications after public assistance 
was approved was 7.5 days with a range from to 36 days (see 
table B-14a) . 

Of the 513 completed nonpublic assistance cases we re- 
viewed in California, 92 percent of the applications were 
denied or had authorizations to purchase issued within 30 days 
of the applicants' initial contacts with local food stamp of- 
fices . 



Major portions of the processing time in California 
occurred between the interview and completion of verification. 
Another lengthy step was between approval of the application 
and issuance of the authorization to purchase stamps. 



WHY PROCESSING TOOK AS LONG AS IT DID 



Applicants' delay in furnishing supporting documents 
caused the longest delays in the cases we reviewed in Califor- 
nia. California was developing new regulations on verification 
to reduce the amount of documentation needed and thus possibly 
reduce the amount of processing time for this step. 

Other reasons for delays were the rescheduling of inter- 
views for applicants' convenience and the fact that three of 
the counties did not issue authorizations to purchase stamps 
during the last week of the month. This cutoff was made 
primarily because the applicants would not receive the author- 
ization in time to purchase stamps for that month. Additional 



36 



APPENDIX V APPENDIX V 



detail on reasons for delays is presented in tables C-13 
through C-16; tables D-13 through D-16 present workload data 
for January to October 1975. 

Monterey County welfare officials attributed their speed 
in processing food stamp applications to their efforts in in- 
structing the community on how to apply for food stamps. Also, 
all of the completed cases we reviewed in Monterey were ini- 
tiated in August 1975 when relatively few new applications 
were being submitted (see table D-15). Local officials said 
that during a busier month, a day or two might be added to 
the average processing time. 

BENEFITS RESUL TING FROM VERIFICATION 

For each completed nonpublic assistance case we reviewed 
in the four projects, we attempted to determine whether 
verification of application information resulted in changes 
in the monthly bonus value of stamps to be issued. The results 
of this effort are summarized below for California and are 
presented in more detail in tables E-13 through E-16. 

Change in 
Ca ses monthly bonus 

Results determinable: 

Benefits to the Government 121 $4,793 
Benefits to the recipient 51 1,164 

Benefits unchanged 294 

Subtotal 466 

Results not determinable 47 

Total 513 

Verification of income caused the most changes in bonus 
dollars — 60 of the 121 cases where the changes benefited the 
Government with $2,204 of the $4,793 of the changes and 34 
of the 51 cases where the changes benefited the recipient 
with $927 of the $1,164 in bonus value changes. In those 
cases where verification results were not determinable, it 
was generally because the records did not include unverified 
information. 



37 



APPENDIX II 

Survey of State and Local Welfare Administrators 



38 



39 



VICE CHAIRMAN 



U.TER B. JONES. N.C. 

i JONES, TENN. 

HN MELCHLR, MONT. 



ERRY LITTON, MO. 



t». ^ousie of ftcpreaentatibea 

Committee on agriculture 

m 1301, Hongtoorti) ftousc Office JtfuilbiiiQ 

31aB!f)inBton, B.C. 20515 



MARGARET M. HECKLER. MASS. 



August 1, 1975 



l H1GHTOWER, TEX. 
<LEY BEDILL. IOW* 
. MC HUGH, W 
SLENN ENGLISH, OK LA. 



JENRETTE, JR.. S.C. 



SPECIAL COUNSEL 



Dear : 



The House Committee on Agriculture has started a comprehensive review 
of the Food Stamp Program. Crucial to the Committee's understanding of the 
program are the views of those directly involved in its administration. 
Accordingly, we have prepared the attached questionnaire in an effort to 
obtain the views of all State Welfare Administrators and a sample of local 
Welfare Administrators. The results will be summarized and the summary will 
be made available to the Committee for its consideration. We will also 
provide you with a copy of the summary. 

The Questionnaire is designed to provide the opportunity for systematic 
analysis of the views of program administrators over a wide range of food 
stamp topics. Quite likely, however, there will be topics you consider 
important which have been excluded. Please feel free to supplement the ques- 
tionnaire with any additional information you believe would be useful to the 
Committee. We are particularly interested in having any survey results or 
studies which you may have done and that remain relevant to current problems 
and procedures. 

We would appreciate having the questionnaire returned as soon as possible, 
but no later than August 31, 1975. It should be addressed to: 

Mr. James E. Springfield 
House Committee on Agriculture 
1301 Longworth House Office Building 
Washington, D. C. 20515 

If you have any questions, please call Mr. Springfield at 202-225-2171. 
Thank you for your cooperation. 

Sincerely, 



Thomas S. Foley 
Chairman 



40 



41 



(office use only) 
Questionnaire * _ 1-4 
card 1 5 
region 6 
state 7-8 

FOOD STAMP QUESTIONNAIRE 
for 

STATE AND LOCAL ADMINISTRATORS 
on 

FOOD STAMPS 



Objective — The purpose of this questionnaire is to collect information from 
state and local administrators concerning the administration of the Food Stamp Pro- 
gram. It provides the opportunity for those directly involved in its administration 
to identify problems and suggest changes. It also asks for administrative cost 
information. The information contained on the returned questionnaires will be anal- 
yzed and reported to the House Committee on Agriculture for its use in considering 
possible legislative changes in the Program. 

Directions — Please respond on the basis of the operation of the program in 
th« geographic area for which you are responsible. 

A number of questions provide you the opportunity to explain your answer and 
to make recommendations for changes. If additional space is needed, please attach 
additional pages and identify by number the questions being answered. These expla- 
nations and recommendations will be given very careful consideration. 

Please ignore the numbers on the far right-hand side of the page. They are 
there to assist in the machine processing of the replies. 

Respondent Identification : 

Name : 

Title: 

Office: 

Address: 

Telephone: 

I. Certification , Issuance , Staffing and Program Size 
A. Certification Of f ices— April , 1975 

. No. of full-time offices 9-12 

. No. of itinerant offices 13-16 

. No. of mobile units 17-20 

ssuance Locations — April, 1975 

No. of full-time ocations _ 21-24 

No. of itinerant locations 25-28 

No. of mobile units 29-32 

C. Issuance Arrangements — April, 1975 
No. of Government Offices 



Cost per Transaction : 



a. Manual Issuance 
(use of HIR cards) 

b. Machine Issuance 
(u«e of ATP cards) 



33-41 
42-50 



No. of Banks 



51-59 



3. 



No. of Post Offices 



60-68 



42 

(2) 

I. (Continued) Certification , Issuance , Staffing and Program Size 

4. No. of other— specify: Cost per Transaction 

_ a. . 69-78 

2 2/5 

_ b. 6-15 

_ c. . 16-25 

_ d. 26-35 

D. No. of Eligibility Workers, April, 1975 

1. NPA — full time 36-39 

2. NPA— part time 40-43 

E. Participation 

1. April 1975 NPA ^4-50 

2. April 1975 PA 51-57 

F. No. of people authorized 
to participate 

1. April 1975 NPA 5R -64 

2. April 1975 PA f5 " 71 

G. Bonus Value of Coupons (thousands of dollars) 2 3/5 

1. April 1975 NPA 6 " 10 

2. April 1975 PA n " 15 

3. Federal Fiscal Year 



1975 NPA 



16-21 



4. Federal Fiscal Year 

1975 PA 22-27 

H. Total Value of Coupons Issued (thousands of dollars) 

1. April 1975 NPA 28-32 

2. April 1975 PA 33-37 

3. Federal Fiscal Year 

1975 NPA 38-43 

4. Federal Fiscal Year .. . . 

1975 PA 

II. In connection with the Administration of the Food Stamp Program , which, if any, 

of the following administrative procedures do you consider major problem areas? 

4 4/5 

A. Accountability for Cash 6 g 

and Coupons — — 

Explanation: 



Recommended Change 



43 



(3) 

(Continued) In connection with the Administration of the Food Stamp Program , 
which, if any, of the following administrative procedurea do you consider major 
problem areas? 

B. Administrative Matching Funds _ _ 9-11 

Explanation: 



Recommended Change 



C. Coupon Issuance _ _ 12-14 

Explanation: 



Recommended Change : 



Efficiency and Effectiveness 
(consider separate from 

Quality Control) _ _ 15-17 

Explanation: 



Recommended Change 



E. Fair Hearings ig 2Q 

Explanation: 



Recommended Change 



44 



(A) 

(Continued) In connection with the Administration of the Food Stamp Program t 
which, If any, of the following administrative procedures do you consider major 
problem areas? 

F. NPA Certification _ _ 21-23 

Explanation: 



Recommended Change 



G. NPA Recertlflcatlon _ _ 24-26 

Explanation: 



Recommended Change 



Outreach 

_ _ 27-29 

Explanation: 



Recommended Change 



I. PA Certification 30-32 

Explanation: 



Recommended Change 



45 



(Continued) In connection with the Administration of the Food Stamp Program , 
which, if any, of the following administrative procedures do you consider 
major problem areas? 

J. PA Recertification 



Explanation: 



Recommended Change : 



K. Quality Control 
Explanation: 



Recommended Change : 



L. Recipient Claims 
Explanation: 



Recommended Change : 



M. Retroactive Benefits 
Explanation: 



Recommended Change 



46 



II. (Continued) In connection with the Administration of the Food Stamp Progi 
which, if any, of the following adminlatrative procedures do you consider 
major problem areas? 

N. Work Registration 

Explanation: 



Recommended Change 



0. Other — specify: 
1. 



Explanation: 



Recommended Change : 



2. 



Explanation: 



Recommended Change : 



III. In connection with the income and resource determinations and verification , 
which, if any, of the following aspects do you consider major problem areas? 

A. Gross Income 

Explanation: 



Recommended Change 



47 



(7) 

III. (Continued) In connection with the Income and resource determinations and veri- 
fication, which, if any, of the following aspects do you consider major problem 
areas? 

B. Income Deductions 57-59 

Explanation: 



Recommended Change : 



1. Shelter Costs 

__ 60-62 

Explanation: 



Recommended Change 



2. Medical Expenses 63-65 

Explanation: 



Recommended Change 



3. Child Care 



Explanation: 



66-68 



Recommended Change 



48 



(8) 

III. (Continued) In connection with the Income and resource deteml nations and 

verification , which, If any, of the following aspects do you consider major problem 
areas? 

4. Tuition and mandatory 

education fees _ 69-71 

Explanation: 



Reconaended Change : 



5. Other— specify: 72-74 



Explanation : 



Rec uuan ended Change : 



75-77 



Explanation : 



Reconeended Change : 

C. Resource Determinations 78-80 



Explanation: 



5 5/5 



Recocoended Change 



49 



(9) 

III. (Continued) In connection with the Income and resource determinations and 
verification , which, if any, of the following aapecta do ymj consider 
major problem areas? 

D. Other— specify: 6-8 

_ I. 

Explanation: 



Recommended Change: 



9-11 



Explanation: 



Recommended Change: 



IV. Categorical Eligibility 

A. Administratively, categorical eligibility for PA households results in: 
(check only one and explain the basis for your Judgment) 

1. Significant savings _ 12-13 

Explanation : 



2. Little or no savings _ 14-15 

Explanation : 



3. Negative savings _ 16-17 

Explanation: 



50 



(10) 



IV. (Continued) Categorical eligibility 

B. Administratively, categorical eligibility for SSI households results in: 
(Check only one and explain the basis for your Judgment 5 

1. Significant savings 18-19 
Explanation: 



2. Little or no savings _ 20-21 

Explanation: 



3. Negative savings 

22-23 

Explanation: 

V. The offer of public assistance withholding is mandated by law, but has not 
been implemented by USDA regulations. Should PAW be: (check only one) 

A. Mandatory? _ 24-25 

Explanation: 



B. State Option? _ 26-27 

Explanation: 



C. Prohibited? 

_ 28-29 

Explanation: 



VI. The ^Variable Purchase Option must now be available to all recipients. Should the 
variable purchase option be: (check only one) 

A. Mandatory? - 30 " 31 

Explanation: 



51 



(id 



VI. (Continued) The Variable Purchase Option must now be available to all recipients. 
Should the variable purchase option be: (check only one) 

B. State Option? 32-33 

Explanation: 



C. Prohibited? _ 34-35 

Explanation: 



VII. Which, if any, of the following groups create special administrative problems? 

A. Aliens _ _ 36-38 

Explanation: 



Recommended Change 



B. Disabled 39-41 

Explanation: 



Recommended Change 



C. Elderly 

42-44 

Explanation: 



Recommended Change 



52 



(12) 

VII. (Continued) Which, if any, of the following groups create special administrative 

problems? 

D. Indians 45-47 

Explanation : 



Reconaended Change 



E. Migrants 48-50 

Explanation: 



Recoasended Change 



F. Military 

Explanation : 



Recoarsended Change 



G. Strikers 

Explanation: 



51-53 



54-56 



Reccncsended Change 



53 



(13) 

VII. (Continued) Which, if l-v , of the fcllcving gr;.p s create s-ecial administrative 
probles* 1 

H. Students 3"-55 

Explanation : 



?.ecc=cended Change 



I. Other— specify : 

_1. »"« 

Explanation : 



Recomended Char.ee 



Explanation : 



Re contended Change 



54 



(14) 



VIII. Outreach — On the basis of experience in your area, please indicate which 
outreach techniques have proved effective and ineffective and explain the 
basis for your assessment. 

Effective Ineffective No Experience 
(circle appropriate number) 



Information distributed 
at grocers 

Explanation: 



Information distributed 
to community groups 

Explanation: 



C. Information distributed 

to other groups (list groups) 



Explanation: 



70 

71-72 



Explanation: 



73 

74-75 



Explanation: 



76 

77-78 



D. Door-to-door Campaigns 
Explanation: 



55 



(15) 

VIII. (Continued) Outreach — effective and ineffective techniques. 

Effective Ineffective No Experience A 6/5 

E. Press releases 1 2 3 6 
Explanation: _ 1 

F. TV and/or radio spots 1 2 3 8 
Explanation: _ 9 

G. Telephone Campaigns (hot line) 1 2 3 10 
Explanation: _ 11 

H. Other—specify: 

_ 1. 1 2 3 12 

Explanation: _ 13-14 

_ 2. 1 2 3 15 

Explanation: 16-17 

_ 3. 1 2 3 18 

Explanation: 19-20 



56 



(16) 

IX. Please provide as much of the following coat data as ia poaalble. While 
some of th« data may not be available in all categories, it will be very 
helpful to have the information in this format to the extent possible. 

A. Administrative Costs Matched by USDA 

(In thousands of dollars) 



1. Total Costs FY 1974 FY 1975 

a. State and Local Share 21-30 

b. USDA Share 31-40 

2. Issuance 41-48 

3. NPA Certification 49-56 

4. Outreach 57-64 

5. Fair Hearings 65-72 

6. Quality Control 73-80 

7 7/5 

7. Data Processing 6-13 

8. Other Administrative 14-21 

9. Fraud Investigations 

and Prosecutions 22-29 

10. Other — specify: 

_ a - _ 30-38 

_ b - _ 39-47 

_ c _ 48-56 

11. Issuance Cost 

per transaction _ . _ _ . _ 57-64 

B. PA Certification Cost Matched by PHEW 

FY 1974 FY 1975 

1. Total Costs 

a. State and Local Share 65-74 

8 8/5 

b. DHEW Share 6-15 



X. Please identify up to five of what you consider to be the most serious 
administrative problems in the Food Stamp Program, from the most serious 
to the least serious. These problems may repeat problems already noted 
above. Briefly explain your reasons for ranking the problems as you do, 
including any available data substantiating your views. 

A. Identification: (most serious) _ 16-17 

Explanation: 



B. Identification: 
Explanation: 



18-19 



57 



(17) 

X. (Continued) Identify up to five serious administrative problems . 

C. Identification: 20-21 

Explanation: 



D. Identification: 22-23 

Explanation: 



E. Identification: (less serious) _ 24-25 

Explanation: 



XI. Please identify up to five administrative aspects of the program that you 

consider most satisfactory and rank them from A. to E below. Briefly explain 
your reasons for ranking the listing as you do, including any available data 
substantiating your views. 

A. Identification: (most satisfactory) _ 26-27 

Explanation: 



B. Identification: 28-29 

Explanation: 



C. Identification: 30-31 

Explanation: 



D. Identification: 32-33 

Explanation: 



58 



(18) 

XI. (Continued) Rank five administrative aspects of the program that you consider 
most satisfactory from A to E. 

E. Identification: (less satisfactory) 34-35 

Explanation: 



XII. In connection vith illegal program abuse , which, if any, of the following do 
you consider major problem areas? 

A. Alteration of ATP Cards 36-38 

Explanation: 



Recommended Change 



B. Black Marketing 39 ~ 41 

Explanation: 



Recommended Changes: 



C. Counterfeiting ^ ^ 

Explanation: 



Recommended Change: 



59 



(19) 

XII. (Continued) In connection with illegal program abuse , which, if any, of the 
following do you consider ma^or problem areas? 

D. Eligibility Worker Fraud 45-47 

Explanation: t 



Recommended Change 



E. Issuance Worker Fraud 48-50 

Explanation: 



Recommended Change 



F. Mail Thefts of Household Allotments 5 1~ 53 

Explanation: 



Recommended Change 



G. Purchase requirement loans to recipients 

by retail store owners/operators 54-56 

Explanation: 



Recommended Change 



75-969 O - 76 - 5 



60 



(20) 



XII. (Continued) In connection vlth illegal program abuse , which, if any, of the 
following do you consider major problem areas? 



Recipient Certification Praud _ 57-59 

Explanation: 



Recommended Change 



I. Thefts of ATP Cards 60-62 

Explanation: 



Recommended Change : 



J. Thefts of Bulk Coupons "-65 

Explanation: 



Recommended Change 



K. Other — specify 

_ 1. 

Explanation: 



66-68 



Recommended Change 



61 



(21) 



XII. (Continued) In connection with Illegal program abuse , which, if any, of the 
following do you consider major problem areas? 

K. (Continued) Other — specify: 

- 2 * 69-71 

Explanation: 



Recommended Change : 



Thank you very much for your time. 



Please return to: 



Mr. James E. Springfield 
House Committee on Agriculture 
1301 Longworth House Office Building 
Washington, D.C. 20515 



If you have questions, please call Mr. Springfield at 202-225-2171. 



62 



63 



SURVEY OF STATE AND LOCAL ADMINISTRATORS 
ON FOOD STAMPS 
HOUSE COMMITTEE ON AGRICULTURE — FEBRUARY 25, 1976 



The purpose of the questionnaire was to collect information 
from the State and local administrators concerning the administra- 
tion of the Food Stamp Program. It provided the opportunity "or 
those directly involved in its administration to identify problems 
and suggest changes. 

Questionnaires were sent to all States plus the District 
of Columbia, Guam, Puerto Rico, and the Virgin Islands. Out of 
54 questionnaires sent, 48 were returned. Responses were not 
received from Arkansas, Maine, New York, South Dakota, the 
District of Columbia and Guam. 

Questionnaires were sent to a randomly selected sample of 
503 local administrators. Responses were received from 382. 

As far as the Committee is aware, this represents the first 
effort to obtain systematically the views of those State and local 
people directly involved in program administration. The infor- 
mation provided by program administrators should prove to be of 
significant value to the Congress as it considers proposed Food 
Stamp legislation. 

I . Identification of Administrative Problems 

Local and State administrators were asked to indicate 
which administrative procedures they considered major problem 
areas and to explain the problems and recommend solutions. 
Listed on the questionnaire were Accountability for Cash and 
Coupons; Administrative Matching Funds; Coupon Issuance; Efficiency 
and Effectiveness; Fair Hearings; Non-Public Assistance (NPA) 
Certification; NPA Recertif ication ; Outreach; Public Assistance (?#. 
Certification; PA Recertif ication : Quality Control; Recipient Clair 
Retroactive Benefits; and Work Registration. 

The administrative procedures most frequently considered majc 1 - 
problem areas by the States were Work Regisration; NPA Certifi- 
cation; Quality Control; NPA Recertif ication ; and PA Certification. 
Listed most frequently by the local administrators were Work 
Registration; NPA Certification; Outreach; Quality Control and 
NPA Recertif ication . 



64 



-2- 

5TATES 

Number Fercent 



Work Registration 42 Sr» 

NPA Certification 36 75% 

NPA Recertif ication 36 75% 

PA Certif ication 36 75% 

j_Lalir. Ccr.trcl. 36 75% 

Coper. Issuance 30 63% 

Recipient Claims 30 63% 

Efficiency and 

Effectiveness 29 60% 

Accountability for 

Cash and Coupons 25 

Outreach 25 52% 

PA Recertification 25 52% 

Matching Funds 21 44% 

Fair Hearings 12 25% 



LOCAL 

Number Percent 



Work Registration 220 58% 

NPA Certification 189 501 

Outreach 182 48% 

Quality Control 180 47% 

NPA Recertification 174 46% 

PA Certification 153 40% 

PA Recertification 123 32% 

Coupon Issuance 104 27% 

Admimstr a tive 

Matching Funds 94 25% 

Recipient Claims 60 16% 

[ Retroactive Benefits 59 15% 

Accountability for 

Cash and Coupons 35 9% 

Efficiency and 

Effectiveness 27 7% 



A . .-.£•; istraticr. 

In order for a household to be eligible for food stamps, all 
able bodied members between the ages of 18 and 65 (with certain 
exceptions) who are not employed at least 30 hours a week or 
attending school at least half time must register for and accept 
suitable employment. The recipient registers for work at the food 
stamp office, and the registration is then fcrwarded to the local 
Employment Service office. Those registered must cooperate with the 
I-:l:j-e:.: ?ervire ir: the En- 1 cymer. t 5erv:;e :r turn repcrts far* 
to the food stamp office regarding any action taken, such as employ- 
ment secured or refused by the recipients. There are certain standards 
of suitability, including payment of the minimum wage, which must be 
met by any job offered to the recipient. Refusal to register for work 
or to accept suitable employment is cause for the household's becoming 
ineligible for food stamps for one year. 



65 



-3- 

The Most coMon complaint about the work registration procedure was 
the apparent lack of results; respondents viewed the time and paper- 
work involved in Meeting this requirement as n onp roductive . Criticise 
was often focused on a lack of follow-up on the part of the Bmployme-.t 
Service ::. ter-.s cf pr::,:.:.: :ohs fir re::.:ier.:s :r re::::::.: oac«i zz 
the fee: starrp office. Peferer.ces -ere r.ade :: ir.cider.ces : :' r.irr. 
unemployment and lay-offs as contributing to this problem. Recommenoed 
were tr.e provision of oe::er service ry ::.e Zr-p 1 : yrre.-.t offices, .r.:lic_-: 
■ore timely reporting, or the waiving of work registration requirements 
:.- areas zz high ur.exp 1 oyer er.t . A less fregier.cly :::ed :-: simlar 
complaint of ineffectiveness cited laxity in the work registration 
requirements: inadequate mechanisms for enforcing active follow-up by 
the recipier.t cr for preventing :h:3e -he ere vc 1 —.eerily _r.e-:l:ye: 
fret ceir.g :er:i::ed :r. the firs: piece. ?e::"e:.:e: -ere = ' ti rr.te-.ir - 
up" cf prigre- r e r _ i r en er. : s . sich es -.ar.dao.r.: ::.e: the recipient :r: _e 
evidence cf ar. active ;cc sear:.: :r notifying one ; :c s_icacilicy or - 
vision. A few re comer, dec that mothers with children over 6 not be 
exerrpted . 

Two other na;cr areas of ecr.cerr. were ore req_irer:er.o tr.at chose 
-p tc the a:e of 65 oe reristerec. ir.clidir.o or.ose already receiving 
recire-er.c eerefics, ar.: the d _p licatior. of effor: that occurs wher. 
those already registered for wor>. .r.der '-IS, . 1 1 or other e-ploy— er.t 
::::rirs rrust :e re- r e g : = tered a: the food star:: offices. In. regar: 
:: :r.e age lirit, there was d_£agree-er.: as :: what _t sr.:_ld r>e -- 
52, 55, 6!, 62, or ipcr. :e::rer.er.: -- hot ser.tirer.t -as strong that to 
regisoer :r.:se aheve the 5_gges:e: lower ere l: - :: ves ser.seless. Ir 
re;eri :: :he prohlerr of d __: 1 1 catior. , it was s-gges:ed oy sorte tr.at :r.e 
fort: oe developed for all progrars or that pro:: zt registration with 



wcrr.er to decemi-.e tr.e eligibility er.d basis ::" be.: t 



66 

-4- 

A myriad of other problems were cited in connection with the NPA 
certification process: lack of staff to do an adequate job; unclear and 
inconsistent interpretation of policy on the State and Federal level; 
difficulties posed by so-called special groups (migrants, students, 
the self-employed, etc.); recipient misunderstandings as to their 
responsibilities and verification requirements; short certification 
periods; inconsistencies with PA eligibility standards; and excessively 
high income and resource standards. Recommendations included utiliz- 
ation of more and better trained staff; certification for longer periods 
of time; more extensive verification of household circumstances; and 
the introduction of a gross income limit. 

C . Quality Control 

The Food Stamp Quality Control Program is administered by USDA 
and carried out by the States. A random sample of non-assistance 
households is selected by each State and all elements of eligibility 
are verified to establish that those who are receiving food stamps 
are (or are not) legally eligible to receive them, are receiving the 
correct coupon allotment, and are paying the correct amount for them. 
USDA publishes the results of Quality Control studies on a semi-annual 
basis . 

The theme running throughout the comments on Quality Control 
was that the procedures and policies of the program result in a dis- 
torted and inflated error rate. The eligibility worker must anticipate 
a household's income and expenses and need not verify every aspect of 
the household's circumstances, in line with the "prudent person" con- 
cept under which the worker is granted the exercise of his reasonable 
judgment. Quality Control reviewers, on the other hand, perform in- 
depth and complete verification subsequent to the household's certifi- 
cation. Many administrators argued that the resultant errors uncovered 
by Quality Control were procedurally built in rather than reflective 
of the quality of work being performed in the food stamp offices. 
Recommended was the confinement of Quality Control reviews to the 
same time frame of the certifying officer -- i.e., checking for errors 
made at the time of certification, or at least within the initial 
certification period. Many suggested that, in general, Quality Control 
and Food Stamp regulations be made to conform and that matters of 
conflicting policy interpretation be clarified beforehand. Another 
common complaint concerned the reporting of technical, procedural 
errors such as missing signatures or missing forms, which were felt to 
be of a less serious nature than errors clearly resulting in a dollar 
loss. Recommended was greater concentration on the latter type of error. 

Also cited were: that Quality Control does not distinguish 
between client-caused and agency-caused errors for purposes of reporting 
and imposing fiscal sanctions; that the current error tolerance levels 
(3% for eligibility and 5% for basis of issuance) are unrealistic; 
and that there is a lack of direct consultation and feedback between 
Q.C. reviewers and eligibilty workers. Recommended, respectively, were 
a careful delineation between the two types of errors; an empirically- 



67 



based revision of the tolerance levels; and substantive consultations 
and feedback between reviewers and certifiers. 

D. NPA Recertif ication 

Under USDA certification regulations, a household's eligibility 
is established for a finite period, generally one, three or six months. 
Further entitlement to food stamps cannot be established without appli- 
cation by the household, an interview, verification, and recertif ication 
of eligibility by the food stamp agency. 

Those who identified this procedure as a major problem area 
questioned the need for performing a completely new determination of 
eligibility at each recertif ication . Especially cited were the time 
and repetitive paperwork involved in completing the certification forms 
and verifying basic information about household circumstances. The 
number of single month certifications was felt to contribute to the 
problem. As an alternative, administrators suggested implementation 
of a shorter recertif ication form, utilizing a "checklist" approach 
which would note in detail only those items which changed. Some 
suggested that the full certification process continue to be mandated, 
but less frequently than at present. 

Another problem cited was that recertif ication could not always 
be completed prior to the end of the household's certification period, 
and a more flexible recertif ication schedule was recommended. It 
should be noted that a good number of those who responded to NPA 
Recertif ication as a problem referred to the problem (s) they cited 
under NPA Certification as applicable to recertif ication as well 
(such as the complexity of the process, staff shortage, et.al.). 

E. PA Certification 

Under current food stamp law, households in which all members 
receive public assistance are automatically eligible for food stamp 
assistance. However, such households still must be certified by a 
food stamp eligibility worker and their basis of issuance calculated 
according to USDA regulations regarding treatment of income and 
deductible expenses, household composition, and resources. 

The necessity for this separate determination and the use of 
different standards, policy regulations, and certification periods 
in the public assistance and food stamp programs were cited in most 
cases by those who considered PA Certification a major problem area. 
Administrators pointed to agency and client confusion, addition time 
for re-calculations, and unnecessary errors as symptomatic of what 
were often termed program inconsistencies. Some others saw the auto- 
matic eligibility of PA households as inequitable to non-assistance 
households. Recommendations spoke to the need for some type of a single 
set of eligibility standards, or at least a single set of forms for 
both programs. A number specified that PA households should not be 
categorically eligible and that their eligiblity for food stamps be 



68 



-6- 

determined solely according to food stamp regulations; a smaller 
number specified that food stamp standards should be made consistent 
with HEW public assistance standards; some suggested that the purchase 
requirement for PA households be standardized; many others did not 
indicate in what manner the PA and food stamp criteria should be made 
to conform. Also recommended was a general strengthening of communi- 
cation and coordination between USDA and HEW, and between food stamp 
and public assistance workers. 

In addition, it should be noted that a good number of admin- 
istrators who denoted PA Certification as a problem referred for their 
explanation to the problems cited under NPA Certification. They 
felt that such problems as program complexity and staff shortages applied 
to both NPA and PA cases. 

F . Outreach 

Each State agency is required by the Food Stamp Act to "undertake 
effective action, including the use of services provided by other 
federally funded agencies and organizations, to inform low-income 
households concerning the availability and benefits of the Food Stamp 
Program and insure the participation of eligible households." The recent 
Bennet v. Butz court decision mandated implementation of more extensive 
outreach activity than the court found to exist. Pursuant to this 
order, State agencies have been required to submit comprehensive out- 
reach plans to the Secretary of Agriculture. 

Administrators expressed their concern that the mandated increase 
in outreach imposed an unreasonable administrative burden on the 
State and local food stamp operations. Alluded to were the large 
expenditures required; the pressure to extend outreach to include 
recipient service activities; the lack of available staff; the 
frequent and detailed reporting requirements; the difficulty local 
offices would have in handling any increases in applications; and the 
impossibility of ever "insuring" participation by all eligible persons. 
Administrators questioned the need for extensive outreach, arguing 
that public awareness of the program is high; they also questioned 
the efficacy of outreach in increasing participation by the needy. 
Another group of responses pointed to negative attitudes toward out- 
reach on the part of county agencies, State legislatures, and the 
general public. Some administrators voiced their support of the 
outreach concept but complained of a lack of staff, time, and money 
to do an adequate job. 

As regards recommendations, there was strong sentiment in two 
major directions: that outreach responsibilities be placed on a 
State or federal level* and that the present legal requirement be 
modified. As to the former, it was recommended that the cost of out- 
each activities, such as additional staff, be borne by the States or 
USDA* -- either entirely or to a greater extent than at present, or 
that all outreach activity be carried out at these levels. Regarding 
the latter, it was suggested that the present statute be modified or 



Local Administrators suggested both State and/or USDA; States suggested USDA. 



69 



even deleted; that the States and local agencies be granted 
greater flexibility in the extent and type of outreach; that 
areas with a high percentage of participation be exempted; and 
that reporting requirements be moderated. 

Other recommendations included the implementation of 
nutrition education ("Inreach") in addition to or instead of 
outreach; the hiring of more staff on the local level to better 
implement the outreach program; and the improvement of the food 
stamp program's public relations in general. 



II. INCOME AND RESOURCE DETERMINATIONS AND VERIFICATION 



Program administrators were asked to identify problems 
specifically related to the determination and verification 
of income and resources. Three major potential problem areas 
were listed: gross income, income deductions, and resource 
determinations. Under "income deductions" were enumerated: 
shelter costs, medical expenses, child care, and tuition and 
mandatory education fees. 



The number and percentage of State and local administrators 
indicating each of these as major problems is as follows: 



70 



State Administrators 



Local Administrators 



Number Percent 



Number Percent 



Income Deductions 

Shelter Costs 
Deduction 



81% 
67% 

58% 
52% 
52% 

50% 
35% 



Medical Expense 
Deduction 

Stelter Costs 
Deduction 



Gross Income 
Determination 

Income Deductions 

Resource Determinations 

Tuition and Mandatory 
Education Fees 
Deduction 

Child Care Deduction 



186 
184 

181 

158 
152 

101 
52 



49% 
48% 

47% 
41% 
40% 

26% 
14% 



Medical Expenses 
Deduction 

Resource determinations 

Gross Income 

Tuition and Mandatory 
Education Fees 
Deduction 

Child Care Deduction 

A. Income Deductions 

Since the broad category of income deductions was so frequently 
cited as a problem, it was felt to be of interest to elaborate on all 
four of the particular itemized deductions listed. 

Under current regulations, the following expenses can be deducted 
from a household's gross income: Ten percent of earned income or 
training allowance not to exceed $30 per household per month; mandatory 
income deductions such as income taxes, social security payments, and 
mandatory union dues; medical costs if more than $10 per month, payments 
for child care when necessary to the employment of a household member; 
tuition and mandatory education fees (exclusive of books, supplies, 
transportation, and the like); unusual disaster or casualty expenses; 
court-ordered support and alimony payments; and shelter costs which are 
more than 30 percent of household income as calculated after all other 
deductions. Shelter costs include utilities, rent, mortgage payments 
and interest, and real estate taxes. 



Administrators indicated that they felt the entire income 
deduction process to be too time-consuming, too complex for both worker 
and client, and too error-prone. The required verification of multiple 
deductions was cited by some as problematic. Other respondents criticized 
what they perceived as a program inequity in that higher income house- 
holds were better able to take advantage of the allowable deductions 
than were poorest households. The difference between calculations of 
income deductions in food stamp and public assistance programs was 
cited, as was the difficulty inherent in attempting to anticipate 
expenses. Some respondents addressed themselves to the work expense 
deduction in particular, arguing that this deduction was unrealistically 
low. 



71 



- 9- 

| 

Use of some sort of standard deduction was most frequently rec- 
ommended as a solution; a few specified that the deduction should be 
based on household size, that it be regionally adjusted, or that some 
additional deductions be allowed over and above the standard one. A 
smaller number recommended that no deductions from gross income be 
allowed for food stamp purposes. Consistency between the food stamp and 
public assistance programs' treatment of income deductions was recommended 
by those focusing on this aspect of the problem. An increase in the 
allowable deduction for work expenses (e.g., to 15% of salary or up to 
$40 or $45) was suggested by those addressing themselves to this par- 
ticular deduction. 

Shelter Costs Deduction 

Difficulties in accurate determination and verification of shelter 
costs were cited by administrators. The computations involved were 
said to be time-consuming and error-prone; seasonal fluctuations in 
fuel and utility expenses were said to necessitate many changes in 
basis of issuance; clients were said to be negligent in bringing in 
receipts for verification purposes. Another common criticism cited 
this deduction as inequitable, because higher income households or those 
living "above their means" are able to take better advantage of it than 
the very poor, the elderly living in fully-owned homes, and others 
living within their means. 

Most frequently recommended was implementation of some sort of a 
standard deduction. A few specified that there be a utility standard, 
seasonally adjusted; that the standard be regionally adjusted, or 
adjusted according to family size; or that households be allowed to take 
more than the standard deduction if their actual expenses are verifiable. 
Also suggested was utilization of the average or prior months' expenses 
in determining the shelter deduction; the inclusion of all shelter ccsts, 
hot just 30%, in the deduction; and the establishment of a maximum 
dollar figure allowable as a shelter deduction. 

Medical Expenses Deduction 

Widely shared among respondents was the judgment that medical 
expenses are impossible to anticipate. Unexpected illnesses or medical 
needs arise during the certification periods, and this was said to cause 
a disservice to the recipient when it was not possible to readjust the 
purchase requirement and to cause excess work for staff when such changes 
were made. Also cited by a number of administrators was the $10 minimum 
expense provision which was felt to penalize the client and to complicate 
procedure . 

Recommended were: utilization of a standard deduction (some sug- 
gested an option for additional individual deductions if verifiable) ; 
use of prior or averaged medical expenses to determine the allowable 
deduction; or allowing for unanticipated medical expenses to be deducted 
at the next certification period. Those criticizing the $10 minimum 
recommended that all medical expenses be deductible. Also recommended 
in some cases was more complete verification of medical expenses. A 
few recommended elimination of this deduction. 



72 



10- 

Tuition and Mandatory Fees Deduction 

Administrators frequently criticized the fact that as it now stands, 
books, laboratory fees, and other necessary educational expenses are not 
included in the tuition and educational fees deduction. Others questioned 
the policy of subsidizing students, or of subsidizing parents who send 
their children to private schools (particularly at the primary and secon- 
dary level). The policy and regulation regarding treatment of these 
deductions was felt by some to be difficult to interpret, and complex 
and cumbersome to implement. 

Those who commented on the non-deductible expenses (e.g., books and 
lab fees) recommended that such necessary educational expenses be 
allowed as deductions. Those questioning the policy itself recommended 
that the deduction be eliminated; that it be restricted to post secondary 
education; or that a standard amount or no more than a maximum amount 
be given as a deduction for those with educational expenses. Also 
recommended was development of a better and simpler method of verifying 
expenses through the institution being attended. 

Child Care Deduction 

Administrators mentioned the following as problematic aspects of 
this deduction: the facility with which receipts and expenses may be 
falsified; the restriction of the deduction to working parents only; 
inconsistencies between PA and FS treatment of this expense; difficulties 
in verification; and the time-consuming nature of the necessary calcula- 
tions . 

Recommended were: allowance of a standard deduction in situations 
where child care is needed; allowance of this deduction for parents in 
school, for disabled parents, or for parents of disturbed or handicapped 
children; consistency between treatment in PA and FS programs; and the 
elimination of the deduction. 

B. Gross Income Determinations 

For food stamp purposes, income is considered wages; public 
assistance, retirement, disability, and veteran#s benefits; workmen's 
or unemployment compensation; pensions; strike benefits; scholarships 
and educational grants; dividends and interest; and most other payments 
from any source which may be considered a gain or a benefit. Excluded 
from consideration as income are the earnings of a child; irregular 
income less than $30 over a three-month period; in-kind payments 
except employer-provided shelter; medical vendor payments; loans; pay- 
ments received from Domestic Volunteer Service programs and the WIC 
program; and non-recurring lump sum benefits (the latter are treated as 
a resource) . 

The income considered is that anticipated by the household over the 
period of certification. USDA regulations specify that income must be 
verified; in many cases this may consist of verifying and documenting 
past income which may reasonably be expected to continue during future 
months of participation. 



73 

Many administrators pointed to the difficulties encountered in 
attempting to anticipate the income of food stamp households. Of these, 
some indicated that not all households, but only those experiencing 
or likely to be experiencing fluctuations in income posed this problem. 
Problems in the accurate determination and verification of self-employed 
households were frequently cited, as were problems in verification of 
non-earned income such as social security, unemployment, and veterans' 
benef its . 

Some administrators mentioned as problematic the calculations 
necessary to determine gross income, which may involve converting weekly, 
annual or irregular salaries to a monthly basis, or other complications. 
The inclusion of training allowances and of certain vendor payments 
(such as HUD housing subsidies) in household gross income was criticized 
by some as penalizing needy households. Others stated that there was too 
high an income limit; criticized the absence of a gross income limit; or 
suggested that some recipients underreport their income. 

The introduction of a gross income limit was recommended by some, 
as was the use of prior income. Among those advocating the latter, 
some suggested that documentable anticipated changes in income be con- 
sidered as well. Those concerned with the inclusion of training 
allowances and vendor payments recommended that these be disregarded when 
determining household income. Regarding problems in verification, some 
administrators suggested bettet coordination with government agencies 
such as the Social Security Administration, IRS, and the Veterans' 
Administration, while others emphasized the need for greater client 
responsibility in providing information and verification. 

C . Resource Determinations 

Each household is allowed up to $1500 in resources and still may 
qualify for food stamps. Those households of two or more persons with 
one or more members age 60 or over may have up to $3000 in resources. 
Resources are defined by regulation to include liquid assets such as 
cash on hand or in a bank; U.S Savings Bonds; stocks and bonds; and 
such non-liquid assets as buildings, land, and certain real or personal 
property. Excluded from consideration as resources in determining food 
stamp eligibility are home and lot normal to the community; one licensed 
vehicle and any other vehicles needed for purposes of employment; life 
insurance policies; real estate producing income consistent with its 
fair market value; and equipment necessary for farming or other income 
producing work. 

Verification of nonexempt resources is only required at the eligi- 
bility worker's discretion, according to USDA regulations. 

Specific complaints and critiques of resource determination 
procedures were myriad and complex. Most frequently cited were the 
difficulties and complexities experienced by administrators in 
interpreting and implementing policy. Difficulties were cited in the 
valuation of nonexempt resources; the determination of exempt vs. non- 
exempt property; the interpretation of the phrase "house and lot normal 
to the community"; the handling of inaccessible or nonliquid resources; 
and the verification of resources. 



-12- 



74 



Other groups of respondents indicated that the current regu- 
lations seemed to them too restrictive. Some felt that the $1500 
limit ($3000 for elderly) on non-exempt resources was too low; others 
cited instances in which a family in possession of non-productive 
acreage or trying to dispose of non-exempt resources at market value 
was ineligible for food stamps. 

Others, however, voiced a concern that the current regulations 
are not restrictive enough. These respondents criticized some of 
the allowable exemptions, such as income-producing property, expensive 
vehicles, and more than one vehicle per household, and felt that 
resources were being undervalued. 

Finally, some cited as a T>ajor problem inconsistencies in 
the treatment qf resourc. n the food stamp and public 

assistance program. Recommt.i. ( d by those concerned with the 
difficulties and complexities of the resource determination process 
were: a USDA review of current policy; development of clear and 
firm guidelines; and clarification of particularly troublesome 
procedures. Those perceiving current resource regulations as too 
restrictive recommended increasing the resource limitation for 
all households (e.g., to $3000 for non-elderly and $5000 for elderly) 
or for only elderly or only non-elderly households; disregarding 
resources for sale at fair market value or allowing time for dis- 
posal of excess resources; or exempting inaccessible or non-productive 
property. Those calling for a tightening up of resource regulations 
suggested a value limit on real property; a tightening of regulations 
regarding transfer of resources for purposes of qualifying for 
food stamps; or a more thorough verification process, such as use 
of tax records. Of those citing Food Stamp-Public Assistance incon- 
sistencies, some proposed that food stamp resource standards be made 
to conform with AFDC/SSI standards, while others recommended consistency 
between these programs' regulations without elaborating on the form 
this consistency might take. 



75 



-13- 

III . Categorical Eligibility 

A. Households in which all members are receiving cash welfare 
assistance payments are eligible for food stamps without regard to 
income and resource eligibility standards. State and local admin- 
istrators were asked, from an administrative standpoint, whether or not 
"categorical" eligibility results in significant administrative savings, 
little savings, or negative savings. The results from *State admin- 
istrators are indicated below. 

Administratively, Categorical eligibility for PA households results in: 



Number * *Percentage 
Significant Savings 15 31% 
Little or no Savings 20 42% 
Negative Savings 10 21% 
No Response 3 6% 



In general, the 31% who indicated that there were significant 
savings suggested that there were savings because much of the work 
of eligibility determination has been done for this category of 
households. Most verifications have previously been made in the 
determination of eligibility for welfare assistance. 

42% of the responses indicated that there were little or no 
savings. Administrators said that the eligibility worker has to go 
through basically the same procedures for PA or non-PA; he is still 
required to determine the food stamp basis of issuance instead of 
using public assistance income determination. 

Negative savings were stated by 21% of the respondents. Among 
the reasons given were that double eligibility determinations still 
have to be made, the present food stamp income determination procedures 
are contrary to the PA budgeting procedures, the PA worker must learn 
both systems, and the entire process generates excessive paper shuffling. 

B. In all except the four States which include the bonus value of 
food stamps in their cash State supplemental payments, households in 
which all members receive cash assistance under the SSI program are 
automatically or "categorically" eligible for participation in the 
Food Stamp program. Administrators were asked: does this categorical 
eligibility result in significant or little savings, or does this result 
in additional administrative cost? 



NOTE* The patterns of response among local administrators was 
relatively comparable to patterns among States. However, we have not 
shown those results because it is readily apparent that there was 
widespread misinterpretation of the question by local administrators 
to mean savings to individual recipients rather than administrative savings. 
** Percentage totals , here and elsewhere, may not equal 100 due to rounding. 



75-969 O - 76 - 6 



76 



-14- 

According to respondents, Categorical Eligibility for SSI House- 
holds results in: 

Number Percent 



Significant Savings 8 17% 

Little or No Savings 25 52% 

Negative Savings 9 19% 

No Response 6 13% 



17% of State administrators indicated that there were significant 
savings, generally because verification requirements are less for these 
households . 

The most frequent response from State administrators (52%) was 
that there are little or no administrative savings resulting from 
categorical eligibility. They expressed the view that the time and 
cost involved in eligibility interviews, verifications, and certi- 
fications is about the same as for other households. 

State administrators who indicated a negative saving (19%) mainly cited the 
extensive basis of issuance work required and the administratively costly application 
procedures . 

IV. Public Assistance Withholding 

The current law mandates the availability of public assistance withholding in 
all States.* Under this provision the State must offer to any household participating 
in the program the option of having the cost of its full monthly food stamp coupon 
allotment deducted from any grant or payment that household is entitled to receive under 
Title IV of the Social Security Act, and have the coupon allotment distributed to it. 

The offer of Public Assistance Withholding is mandated by law, 
but has not been implemented by USDA regulations. Administrators were 
asked: should implementation of PAW be mandatory (i.e., should States 
be required to offer PAW) ; should implementation be a State option 
(i.e., should States be allowed to decide whether or not they will offer 
PAW); or should PAW be prohibited (i.e., should States be prohibited from 
offering PAW)? 

State Local 
Number Percent Number Percent 



Mandatory 3 6% 52 14% 

State Option 41 85% 155 41% 

Prohibited 2 4% 100 26% 

No Response 2 4% 75 19% 



6% of State administrators felt this requirement should be mandatory; 
however, they generally recognized the difficulty in administering it, 

*NOTE PL 94-182 extended the implementation date of this provision 
until October 1, 1976. 



77 



-15- 

particularly since many local counties lack adequate facilities. 
14% of local respondents supported a mandatory requirement and pointed 
out that public assistance withholding provides easier access to food 
stamps particularly for rural participants. They indicated there is less 
of a problem to clients in budgeting for stamps as the purchase price is 
already deducted from the welfare check. As a rule, the local admin- 
istrators tended to interpret this question from the recipient's point 
of view and their answers tended to reflect these concerns. 

A State option to offer PAW was overwhelmingly favored by State 
administrators. A concern about the possibility of mail theft in all 
or some localities appeared frequently in these responses. State 
administrators also observed that not all States share the capability 
of an integrated computer system for public assistance and food stamps, a 
capability said to be necessary for PAW implementation. The need to take 
into account other variances in administrative systems was also cited. 
The local administrators also favored a State option (41%). They 
expressed concern over mail theft and spoke of difficulties in imple- 
mentation because there are two different agencies administering the 
two different programs with resulting difficulty in coordination. 

Only 4% of State administrators wished to prohibit PAW. Among 
the reasons given were that present local option mail issuance systems 
effectively meet the recipient's need for postal delivery and that 
administration of PAW is complex, time-consuming, and costly. 26% of 
local administrators felt that the offer of this option should be 
prohibited. Again, the problem of mail delivery of negotiable food 
coupons was mentioned, as was the feeling that PAW creates more depend- 
ence on "the system", whereas clients should be encouraged to rely 
on themselves and act independently. 

V. The Variable Purchase Option permits households to purchase three- 
quarters, one-half, or one-quarter of their total monthly coupon 
allotments . 

The v ariable purchase option must now be available to all recip- 
ients. Administrators were asked whether the variable purchase option 
should be mandatory (i.e., should States be required to offer it); 
a State option (i.e., should States be allowed to decide whether or not 
they will offer it); or prohibited (i.e., should States be prohibited 
from offering it)? 

State Local 





Number 


Percent 


Number 


Percent 


Mandatory 


14 


29% 


193 


51% 


State Option 


21 


44% 


107 


28% 


Prohibited 


9 


19% 


33 


9% 


No Response 


4 


8% 


49 


12% 



29% of State administrators indicated their support for a manda- 
tory offer of the variable purchase option. Generally they felt that 



78 



-16- 
th is option provides the greatest service to recipients at a minimal 
cost, allowing individuals to participate in the program when total 
coupon purchase money is not available. Slightly over half, 51%, of the 
local administrators prefer continuing the present mandatory offer. Many 
of their recipients use the variable purchase option, and they did not 
want the State agency to have the option of denying this opportunity to 
clients. Comments reflected a concern with the service provided to 
clients by this option and with the possibility that some households 
would be unable to afford their stamps without it. 

The offer of the variable purchase at a State's option was the 
preference of 44% of State administrators. They stated that a very 
small percent of the caseload uses the variable purchase option, and that 
therefore it is very costly relative to benefits. The choice, felt these 
respondents, should be exercised by the responsible State agency, taking 
into consideration both the benefits to the food stamp participants and 
the cost to the State relative to other priorities. 28% of local admin- 
istrators preferred this optional approach. Their comments generally 
agreed with State administrators in that the variable purchase option was 
seen as good for a small percentage of recipients but costly to the 
administering agency. 

Of the State administrators, 19% felt that the offer of the variable 
purchase option should be prohibited, as did 9% of local administrators. 
In addition to the criticisms that only a small percent of clients use 
this option, and that to offer it further complicates the process, one 
of the most frequently voiced was that the variable purchase option 
defeats the purpose of the Food Stamp program because it allows house- 
holds to obtain less than the coupon allotment required for a nutri- 
tionally adequate diet. 

VI . Special Groups 

Administrators were asked: "Which, if any, of the following 
groups create special administrative problems?" Listed were -- aliens, 
the disabled, the elderly, Indians, migrants, military, strikers, and 
students. Most frequently identified by the State administrators were 
students and by local administrators were strikers. 

State Local 





Number 


Percent 




Number 


Percen 


Students 


33 


68% 


Strikers 


152 


40% 


Strikers 


27 


56% 


Students 


123 


32% 


Migrants 


23 


48% 


Elderly 


94 


25% 


Elderly 


15 


31% 


Migrants 


86 


23% 


Disabled 


11 


23% 


Disabled 


56 


15% 


Aliens 


8 


17% 


Aliens 


27 


7% 


Indians 


8 


17% 


Military 


18 


5% 


Military 


6 


13% 


Indians 


17 


5% 



79 



-17- 

Under current regulations, as mandated by law, a student who is 
18 years of age or older and enrolled in an institution of higher 
education is required to meet the tax dependency criteria for eligibility 
in addition to all other financial and nonfinancial eligibility criteria 
established for the food stamp program. Such a student is himself 
ineligible if he is properly claimed as a tax dependent by an ineligible 
parental or guardian household. 

A. Students 

The complexity of the tax dependency criteria was singled out as 
a major concern of the administrators. This procedure was widely 
viewed as an additional administrative burden associated with this 
group of applicants. Frequently noted as well were difficulties in 
accurate determination of student eligibility and basis of issuance. 
In this regard were mentioned (1) the special calculations necessitated 
by students' multiple income sources and uneven cash flow (e.g., scholar- 
ships, loans, and tuition, all prorated over the school year); and (2) 
difficulties in accurately determining household composition of student 
applicants (i.e., applying the economic unit concept to unconventional 
living arrangements) . Other less frequent responses spoke to a negative 
public reaction to student use of food stamps; a feeling on the part of 
the administrators that students are voluntarily unemployed and should 
not be subsidized by this program; and a concern with the ability of some 
students to find loopholes and take unfair advantage of the program. 

Recommended were the elimination or simplification of the tax 
dependecy criteria; a tightening or clarification of household compo- 
sition (economic unit) regulations; and the elimination of students 
from the food stamp program. Some of those advocating the latter 
position suggested that some students remain eligible, such as those 
from public assistance families, those with dependents, those working 
their way through school, or those attending under the G.I. Bill. 

B. Strikers 

Most frequently cited by those who indicated strikers as a 
problem group was the inability of staff to handle the sudden and 
substantial increase in caseload occasioned by the onset of a strike. 
The negative reaction of the public to striker eligibility was cited 
as a major concern. Administrators also questioned the propriety of 
striker participation in the food stamp program, stating that strikers 
are voluntarily unemployed and that food stamps may be subsidizing one 
side in labor disputes. Others related experiences with demanding and 
uncooperative attitudes on the part of striker applicants, including 
in some cases, union or political pressure to certify the applicants. 

Of those offering a recommendation for the particular problem (s) 
described, most common was that strikers not be eligible for food 
stamp assistance. Some qualified this, suggesting that those in dire 
need or eligible prior to the strike be allowed to receive stamps. 
A number of administrators suggested that there be a designated waiting 
period before those on strike could apply or be certified for food stamps. 
A smaller number recommended that additional staff be hired or that 
unions perform some prescreening to lessen the eligibility worker's 
workload . 



80 



-18- 

C. Migrants 

Here the overwhelming concern was with the severe difficulties 
encountered in accurately determining and verifying migrant eligibility 
and basis of issuance. Due to the inherent instability of migrant 
income and place of residence, verification of resources, income, and 
residency and anticipation of income were cited as difficult or even 
impossible to ascertain. Concern was expressed that some of migrant 
families may be participating in more than one project area -- or at 
least that it is difficult to determine otherwise in some cases. Re- 
commended was the development of a nationwide certification system for 
migrants, such as a USDA-sponsored data exchange, the issuance of a 
nationally accepted yearly certification card containing the household's 
previous basis of issuance records, or greater standardization in treat- 
ent of migrant income (e.g., use of prior or average annual income). 

A few pointed to the present continuation of certification forms 
as unwieldy and time-consuming, and a few others commented on the 
language barrier between eligibility workers and Spanish-speaking 
migrants. Recommended respectively were elimination or modification 
of the transfer form procedure and utilization of bilingual forms and 
personnel . 

D. The Elderly 

Those who identified the elderly as a problem group tended to 
signify that the elderly experienced problems as food stamp recipients 
more than they caused problems for food stamp offices. 

Many elderly recipients' difficulties in understanding complex 
food stamp regulations, complying with verification requirements, and 
completing the detailed forms were viewed as problems for both recipient 
and worker alike. Difficulties in getting to the food stamp and 
issuance offices were said to create hardship and to limit the part- 
icipation of the elderly. Also cited as inequities or factors contri- 
buting to low participation of the elderly -- itself mentioned as a 
problem -- were restrictive resource limitations; potential eligibles' 
antipathy to "welfare"; inability to take advantage of itemized expense 
deductions; purchase requirement increases concomitant with Social 
Security and SSI benefit increases; and in general, the small bonus 
available to many elderly households. 

Regarding the application process, it was suggested that the 
procedure be simplified for the elderly or that more help be made 
available to them in completing the procedure. Longer certification 
periods; greater use of home visits, telephone interviews, and 
itinerant offices; and development of community transportation were 
recommended in response to mobility problems. Increased allotments or 
decreased purchase requirements were sought by those advocating an 
increase in benefits. Also recommended was better coordination between 
food stamp and Social Security/SSI benefits. 



81 



-19- 

VII . Outreach 

The outreach question had two purposes. The first was to find 
out which outreach techniques local and State administrators used to 
inform potential eligibles about the program. The second was to 
determine whether the administrators judged the techniques to be 
effective or ineffective. 

The question stated: "On the basis of experience in your area, 
please indicate which outreach techniques have proved effective and 
ineffective and explain the basis for your assessment". Space was 
also provided for the administrators to indicate if they had "no exper- 
ience" with the techniques. 

There were six techniques listed: (1) information distributed 
at grocers; (2) information distributed to community groups; (3) door- 
to-door campaigns; (4) press releases; (5) TV and/or radio spots; (6) 
telephone campaigns (hot line). In addition, space was provided for 
comments and for other techniques used to be described by those answering 
the questionnaire. 

Table I is a summary of the responses of State and local admin- 
istrators to the whole outreach question, while Table II relating to 
effectiveness is a summary of responses from those having experience 
with the six outreach techniques. 

Table I shows that the three outreach techniques used most 
widely by both State and local administrators were: information 
distributed to community groups, press releases, and television 
and/or radio spots. In the State returns more than 50% indicated 
no experience with the three other techniques -- information dis- 
tributed at grocers, and telephone and door-to-door campaigns, and 
41% for information distributed at grocers. 

The nonresponse rate for all techniques was higher among 
locals than states, varying among techniques from 8-9% nonresponse 
for States and from 16-24% for local areas. 



82 



-20- 



1. Information distributed 
at grocers 

Effective 
Ineffective 
No Experience 
No Response 

2. Information distributed 
to Ccmnunity Groups 

Effective 
Ineffective 
No Experience 
No Response 

3. Door-to-door Campaigns 

Effective 
Ineffective 
No Experience 
No Response 

4. Press Releases 

Effective 
Ineffective 
No Experience 
No Response 

5. TV and/or Radio Spots 

Effective 
Ineffective 
No Experience 
No Response 

6. Telephone Campaigns 

(hot line) 
Effective 
Ineffective 
No Experience 
No Response 



Outreach, Table I 
Summary of Responses 



STATE LOCAL 
Number Percent Number Percent 



19 40% : 105 28% 

1 2% : 50 13% 

24 50% : 158 41% 

4 8% : 69 18% 



40 83% : 191 50% 

: 74 19% 

3 6% : 56 15% 

5 10% : 61 16% 

6 13% | 25 7% 

6 13% : 40 11% 
27 56% : 222 58% 

9 19% : 95 24% 

33 69% i 225 59% 

7 15% : 65 17% 
3 6% : 32 18% 
5 10% : 60 16% 

33 68% \ 178 47% 

5 10% : 32 8% 

3 6% : 98 26% 

7 15% : 74 19% 



13 27% : 30 8% 

4 8% : 40 11% 

27 56% : 224 59% 

4 8% : 88 22% 



83 



Outreach, Table II 



-21- 



State Administrators 
Indicating Experience 
With Specific Outreach 
Techniques 



Local Administrators 
Indicating Experience 
With Specific Outreach 
Techniques 



Number 



Percent 



Number 



Percent 



1. Information Distributed 
to Comrrunity Groups 

Effective 
Ineffective 

2. Information Distributed 
at Grocers 

Effective 
Ineffective 

3. TV and/or Radio Spots 

Effective 
Ineffective 

4. Press Releases 

Effective 
Ineffective 

5. Telephone Campaigns 
(hot lines) 

Effective 
Ineffective 

6. Door-to-door Campaigns 

Effective 
Ineffective 



100% 




95% 
5% 



87% 
13% 



83% 
18% 



76% 
24% 



50% 
50% 



191 
74 



105 
50 



178 
65 



225 
65 



72% 
28% 



68* 

32% 



85% 

15% 



78% 
22% 



43% 
57% 



38% 
62% 



84 



-22- 

With respect to effectiveness, Table II reveals that information 
distributed to community groups was judged 100% effective by State 
administrators who had experience with this technique. These admin- 
istrators observed that information distributed to community groups 
enables them to effectively locate, prescreen and refer needy house- 
holds. In addition, information distributed at grocers, press releases 
and television and radio spots were judged effective by a vast majority 
of State administrators having experience with them. Of local admin- 
istrators experienced in these four techniques, 85% said television 
and radio spots were effective, commenting that with this technique 
access to household is good. 

Television and radio spots were followed by press releases, 
which were seen as aiding in public relations and making more people 
aware of the program; information distributed to community groups; 
and information distributed at grocers. 

A number of administrators said they were in the process of 
beginning outreach in grocery stores. Comments varied on the effective 
ness of this type of effort. One administrator said that "support from 
local grocers helps to break down community attitudes toward the Food 
Stamp program," while another stated that "grocers attitudes toward 
the Food Stamp program and its recipients depend strongly on attitudes 
of their clientele." 

State administrators had less experience with telephone campaigns 
and door-to-door campaigns. Table II establishes that those who tried 
telephone campaigns rated the technique highly effective. The limited 
number of responses on door-to-door campaigns were equally divided 
between effective and ineffective. Local administrators also had 
less experience with these two techniques, but a majority of those 
with experience in door-to-door campaigns and telephone campaigns 
judged them to be ineffective. On door-to-door efforts local admin- 
istrators cited lack of staff to carry out this approach effectively. 
Others said there was resistance from those who did not like to be 
identified as low income or poor by the door-to-door approach. 



Vlll. Most Serious Administrative Problems 

Administrators were asked to identify up to five of what they 
considered to be the most serious administrative problems in the food 
Stamp program, to list them in order from most to less serious, and 
to briefly elaborate on the specified problems. 

As was the case generally, the response rate of the State 
administrators was higher than that of the local administrators. 
The following table indicates the number and percentage of admin- 
istrators identifying serious problems at each level of seriousness. 



85 



RESPONSE RATE 

STATE LOCAL 





Number 


Percent 


Number 


Percent 


Most serious problem 


45 


94% 


306 


81% 


2nd most serious problem 


44 


92% 


273 


72% 


3rd most serious porblem 


45 


94% 


237 


62% 


4th most serious problem 


41 


85% 


204 


53% 


5th most serious (i.e., least 
serious ) 


37 


77% 


160 


42% 



Administrators' responses were analyzed and categorized as to 
the area of concern and the type of problem associated with it. The 
following ranking was then obtained by assigning a weighted value 
to the number of times a problem was mentioned at each of the five 
levels. In brackets are the total number of times the problem was 
indicated by the administrators regardless of ordinal level. 

STATE LOCAL 
[N = 47] [N = 382] 



Certification [82] : 
-policy/f orms/p#ocedures too 

complex/cumbersome/prolonged 

[16] 

-rules and regulations (as in 
Handbook) unclear/difficult to 
apply [3] 
other [3] 



Staffing problems [131]: 
-current staffing level unable 
to keep up with caseload and 
complex program requirements [110] 
-other [21] 



Food Stamp Public Assistance 2 
Program inconsistencies : dif- 
fering standards/regulations; 
dual accountability to USDA and 
DKEW [18] 

Changes in FSP rules and regu- 
lations: too frequent/too nu- 
merous/insufficient prior notice 
[14] 3 



Certification [102] : 
-policy/forms/procedures too 

complex/cumbersome/prolonged [44] 
-rules and regulations (as in Handbook 

unclear/difficult to apply [33] 
-accurate determination of household 

composition difficult [20] 
-other 

Food Stamp/Public Assistance 
program inconsistencies: dif- 
fering standards and regulations/ 
dual accountability to USDA and 
DHEW [75] 



86 



-24- 

STATE 
[N = 47] 

4. Relations with USDA [16]: 
-excessive monitoring/insuf f icient 

helpful consideration [13] 
-other [3] 

5. Gross Income Determination [11]: 
-difficult/impossible to antici- 
pate household income [8] 

-other [3] 



6. Lack of State/local flexibility: 
lack of autonomy/flexibility in 
administration of the program [12] 



7. Income deductions [8]: 

-too many allowed/too time-con- 
suming and cumbersome to 
accurately determine [6] 

-other [2] 



9. Food Stamp Program complexity.: 

unclear/complex/administratively 
costly/conflicting policies and 
regulations [8] 



LOCAL 
[N = 382] 

4. Changes in FSP rules and regu- 
lations: too frequent/too 
numerous/insufficient prior 
notice [56] 

5. Gross Income Determination [51] : 
-difficult/impossible to 

anticipate household income 
[33] 

-difficulties in calculation/ 

verification [15] 
-other [3] 

6. Recipient fraud and illegal 
use of stamps [53]: 
-failure to report income/ 

other intentional misrepre- 
sentation of household's 
circumstances [24] 

-insufficient investigation/ 
enforcement/prosecution [22] 

-other [7] 



7. Work registration [45]: 

-no response from Employment 
Service/no resultant jobs/ 
nonproductive administrative 
requirement [33] 
-policy not strict enough/ 
recipients fail to follow 
up [12] 

Food Stamp Program complexity: 
unclear /complex/admin istr a t- 
ively costly/conflicting pol- 
icies and regulations [38] 



9. Quality Control: unrealistic 
Quality Control guidelines/ 
procedures inconsistent with 
those of eligibility worker/ 
resultant inaccurate measure of 
of program error [37] 



8. Quality Control: unrealistic QC 8. 
guidelines/procedures incons is tent 
with those of eligibility worker/ 
resultant inaccurate measure of 
program error [16] 



87 



-25- 



STATE 
[N = 47] 



LOCAL 
[N = 382] 



10. Outreach [7]: 

-requirements pose unreasonable 

administrative/financial 

burden [5] 
-other [2] 



10. Income Deductions [33]: 

-too many allowed/ too time- 
consuming and cumbersome to 
accurately determine [25] 
-other [8] 



Some elaboration on these problems follows. It should be 
noted that "administrators" as used here means "administrators who 
described this aspect of the program as a major problem" . 

Certification . Administrators felt that the policies and pro- 
cedures governing the certification process are so complex, cumber- 
some, and difficult to apply that they seriously and adversely 
affect the administration of the program. The sheer length of time 
required and number of forms involved were cited in this regard, and 
difficulties in accurately determining household composition were 
mentioned by some as especially troublesome. Said one administrator: 
"The regulations represent an effort to be fair by taking into con- 
sideration every possible situation and f actor .... However , by this 
very effort to be 'fair and equitable' to everyone individually, we 
are fair and equitable to no one. The program is an administrative 
nightmare of detailed regulations, deductions, and exceptions." Said 
another: "It can take as many as eleven forms to certify a family 
for food stamps. This not only increases the time needed to interview 
the client, but it also increases the possibility for errors." 

Staffing problems . This was the number one concern of local 
administrators. The inability of the current staff at food stamp 
offices to keep up with heavy caseloads and complex program require- 
ments was cited as a major cause of myriad other administrative fail- 
ings. "Lack of staff," said one respondent, "creates backlogs, long 
waiting periods, long lines, hostilities, inferior work, and morale 
problems." Another stated: "Staffs are too small and worker turn- 
over is terriffic. I don't think any area has adequate staff to do 
quality work in certifying and reviewing food stamp cases." 

Food Stamp/Public Assistance program inconsistencie s. Admin- 
is tratoTs~rl2firrTel5~To — dTfTi standards 
and regulations in these programs, often administered by the same 
worker and/or for the same recipient. This was felt to contribute 
to confusion, complexity, and errors. The dual accountability of 
State and local welfare agencies to USDA and HEW was also cited. 
Representative was this comment by a State administrator: "The 
rules for food stamp eligibility vary extensively from the rules 
of other assistance programs, necessitating separate application and 
determination of food stamp eligibility or considerable modification 
of case file data already maintained for the assistance household." 
Complained a local administrator: "The operation of the Food Stamp 
Program by USDA and the AFDC program by HEW creates an administrative 
nightmare for county welfare department employees who must admin- 
ister both programs." 



88 



-26- 

Changes in program rules and regulations . Administration of the 
program was said to be seriously hampered by frequent and numerous 
changes in rules and regulations, and by insufficient prior notice 
of such changes. Regarding this latter point, one State administrator 
said: "Insufficient lead time to study, analyze, develop and implement 
or modify State regulations and operating systems by prescribed dates 
results in 'inefficient' and 'ineffective' crises oriented program 
management at all levels." 

Gross Income Determination . The accurate anticipation of house- 
hold income was felt by administrators to present a near insurmount- 
able difficulty in some or most cases. "With families whose income 
and living situation are unstable," said one adminstrator , "antici- 
pation of what the next month will bring is often an impossibility." 
Other difficulties in calculating income, such as converting irregular 
income to a monthly basis and determining nonearned income, were also 
mentioned . 

Relations with USDA . Stressed primarily by the States, the problem 
was typified by this comment of a State administrator: "The federal 
USDA tends to over-supervise States on day to day operations. Not 
enough helpful consideration or guidance is given--only negative nit- 
picking." Said another: "The problem most difficult for me to cope 
with is lack of directives coupled with too many administrators ... None 
are giving those of us who work directly with the client necessary 
training, information, and tools to do an adequate job." In addition, 
a few cited lack of State input on the federal level as characteristic 
of their relationship with USDA. 

Lack of State/local flexibility - Administrators complained of 
a lack of autonomy and flexibility in best administering the program 
to suit local needs; the lack of authority to institute pilot programs 
was mentioned in this regard. Said a State administrator: "Policy is 
being made for big population centers with no thought as to how they 
can be administered in rural States." "It is possible," argued another 
"to have uniform national standards with a built-in flexibility to 
meet unusual local circumstances." 

Recipient fraud and illegal use of stamps . Here the problem was 
twofold: the existence of recipient fraud and the lack of effective 
investigation and enforcement were viewed as major challenges to the 
successful functioning of the program. A local administrator explained 
"The word gets around that we can't do anything about repayment, and 
this does two things: 1. It encourages recipients to lie because 
they have nothing to lose if caught, and 2. It upsets the general 
public who see their tax money wasted. We prosecuted one case last 
month and the following two days we were flooded with phone calls 
from recipients wanting to pay their claims, from people confessing 
new information, from people thanking us for doing the right thing. 
It did a lot to stop cheating in the Food Stamp Program." 



89 



-27- 



Income Deductions. Administrators expressed their concern with 
the number of deductions now allowed, particularly with regard to 
the time-consuming and cumbersome determinations required. One State 
administrator, citing "the complexity of net income computation require- 
ments" as a major problem, stated: "Prompt attention to simplification 
of existing requirements is essential in view of the costly time factor 
and high error rate associated with this single area". 

Quality Control. Administrators cited unrealistic quality control 
guidelines; procedures that are inconsistent with those utilized by 
eligibility workers; and a resultant inaccurate measure of program 
error. Said one administrator: "Public confidence in the program can 
not escape further erosion when the large number of errors are citeo, 
and the morale of food stamp workers can not escape further undermining 
when attention is called to an 'error' that has been carried out 
correctly according to the worker's guidelines." Said another: "They 
review [cases] after the fact; we must project income and expenses. 
This inflates the error rate. Also they record technical mistakes 
which don't actually affect eligibility." One State administrator 
suggested "It could be more practical to redesignate half or more of 
the [QC] reviewers as certifiers." 

Work Registration . Administrators viewed this procedure as a 
riajor problem because it is nonproductive. Lack of response by the 
Employment Service was cited as precluding either employment for those 
willing to work or administrative sanctions against those unwilling to 
do so. Said one local administrator: "This requirement sounds good 
but is a total farce. The employment office has not found a job for 
one food stamp recipient and in fact has set up only a half dozen 
appointments in the past seven years." Said another: "Merely completing 
the 284 [work registration form] does not create a job seeker." 

Food Stamp Program complexity . Comments on this problem reflected 
administrators' general sense that the program is laden with unclear, 
complex, administratively costly, and conflicting policies and regulations. 
One State administrator stated that "the program is on the brink of 
breaking down due to the weight and complications of the administrative 
requirements which have accumulated to the point where it is impossible 
to achieve an acceptable level of performance." 

Outreach . Administrators questioned the need for expanded outreach 
and doubted its efficacy in bringing eligibles into the program, but * 
mainly they saw the mandated outreach activities as posing an unreasonable 
administrative and financial burden on local and State agencies. Refer- 
ring to the "nationwide outreach program as required by Bennett vs. 
Butz , " a State administrator said: "This decision has , imposed an 
unworkable system on the States that cannot be adequately staffed 
nor the stated goals reached." 



90 



-28- 

IX. Most Satisfactory Administrative Aspects 

Similar to the previous question, administrators were asked 
to identify up to five most satisfactory administrative aspects of 
the program. As indicated in the table below, the response rate to 
this question was significantly lower than that to the previous 
question, indicating that administrators more readily identified serious 
problems than satisfactory aspects of the program. 

STATE LOCAL 







Number 


Percent 


Number 


Percent 


Most satisfactory aspect 


29 


60% 


233 


61% 


2nd 


most satisfactory aspect 


27 


56% 


186 


49% 


3rd 


most satisfactory aspect 


24 


50% 


121 


32% 


4th 


most satisfactory aspect 


19 


40% 


95 


25% 


5 th 


most satisfactory aspect 


11 


23% 


69 


18% 



(i.e., least satisfactory) 



Responses were analyzed and ranked in the same manner as the 
previous question. As can be noted from the bracketed figures, many 
of even these most frequently mentioned satisfactory aspects were 
mentioned by only a small number of administrators, both State and 

local . 



STATE 
(N = 47) 

1 . Recipient benefits [11] : 1 . 
-food/nutrition benefits: improved 

nutrition intake/better food se- 
lection/increased food purchasing 
power/stamps must be used for food [8] 
-standard of living benefits: hedge 
against inflation/more money available 
to meet other expenses [3] 

2. Program funding [12]: 
-administrative matching funds work 

well/are necessary for implement- 
ation [9] 2. 
-federal funding of bonus coupons: 
positive economic stimulus [3] 



LOCAL 
(N = 382) 

Recipient benefits [116] : 

-food/nutrition benefits: improved nu- 
trition intake/better food selection/ 
increased food purchasing power/stamps mus 
ust be used for food [70] 

-standard of living benefits: hedge 
gainst inflation/more money available to 
to meet other expenses [29] 

-recipient self-respect: benefits the 
working poor/keeps households off 
welfare/supports families [17] 

Coupon issuance: various procedures and 
issuance arrangements work well [69] 



91 



29- 



STATE 
(N = 48) 



LOCAL 
(N = 382) 



3. Relations with USDA [9]: 

-cooperative/helpful/responsive 

to state needs [7] 
-allows for State input in program 

change [2] 



Accountability for cash and 
coupons: procedures work 
well [7] 

Staff [61: 

-well-trained/well-utilized [4] 
-honest/conscientious/dili- 
gent [2] 



6. Coupon issuance: Various proced- 
ures work well [7] 



Staff [41]: 

-well-trained/well- utilized 
[17] 

- hones t/conscientious/di 1 i - 

gent [15] 
-other [9] 

Manual (Handbook) and form? ■. 
easy to work with/revision^ 
are improvements [40] 

Program funding [26]: 
-federal funding of bonur 

coupons: positive economic 

stimulus [15] 
-administrative matching funds 

work well/are necessary 

implementation [11] 

Accountability for cash and 
coupons: procedures work 
well [28] 



7. USDA monitoring/Quality Control/ 
Audits: identifies problem areas/ 
aid to implementation of correct 
procedure [6] 



7. Relations with State agency 
cooperative/helpful/respon- 
sive [23] 



8. Fair Hearings: operates well/ 8 
guarantees recipient's rights [6] 

9. Outreach: successful in getting 9 
information to potential eligibles 
[5] 



10. Coupon allotment: as adjusted semi- 10, 
annually, serves recipient [5] 



PA/SSI Certification: 
and sufficient [24] 



short 



Variable Purchase Option: 
best serves recipient/some- 
times necessary for partici- 
pation [24] 

Work registration [21] : 
-allows for administrative 
sanctions against voluntarily 
unemployed recipients [10] 
-other [11] 



75-969 O - 76 - 7 



92 



-30- 

Some elaboration on these satisfactory aspects follows. It should 
be noted that "administrators" as used here means "administrators who 
described this aspect of the program as satisfactory." 

Recipient Benefits . The benefits provided to recipients by the 
Food Stamp program, and the positive effects of these benefits on 
recipients' well-being, was the most satisfactory aspect of the program 
to both State and local administrators. Most commonly cited were food 
and nutrition benefits: that stamps channel household money into food, 
that the bonus increases household food purchasing power, and that 
better food selection and improved nutrition result. Some administrators 
observed that food stamps provide a hedge against inflation and allow 
money to be available for other household expenses, or that food stamps 
provide assistance to the working poor and help make ends meet for 
marginal non-welfare families. Typical were these comments: "[Food 
Stamps] help stretch the food dollar so that more nutritional meals 
can be served. Because of the bonus stamps received by each client, they 
can buy more food and must buy edibles only." "If the money is spent 
on food stamps, at least you know the children will eat." "When large 
families or families with large medical bills or housing costs want to 
remain independent and continue to earn as much as they are able to, 
with food stamps they get assistance without AFDC . " "It has been a 
lifesaver to many individuals in our high unemployment area." 

Program funding . State and local administrators expressed their 
approval of the arrangements whereby federal funds pay for 50% of all 
administrative costs and 100% of food stamp "bonus" costs. Admin- 
istrative matching funds were viewed as working well and as necessary for 
program implementation , while the federal funding of bonus coupons was 
viewed in terms of its positive economic effects on the community. 
One State administrator stated that matching funds are "the only way 
the States will be able to afford effective programs that accomplish 
the objectives of providing nutritional assistance to the eligible 
applicants." With regard to federal funding of bonus coupons, another 
State administrator observed: "This was multiplied at least 1.43 times 
in the rural economy, and more in the urban economy, and thus provided 
considerable economic impact." 

Coupon Issuance . Administrators referred to various procedures and 
issuance arrangements that»work well within their jurisdictions. Stated 
one: "Mail issuance reduces the number of persons in the office and 
also is a help to elderly and disabled persons and persons with trans- 
portation problems." Said another: "Issuance of food coupons by the 
Post Office has proved very satisfactory." Others commented on the 
availability of various issuance procedures which are optional to the 
States. 

Relations w i th USDA . Administrators found the Food and Nutrition 
Service of the USDA to be cooperative and responsive to State needs. 
A few cited State input in USDA policy changes. Said one administrator: 
"Regional FNS staff have been most cooperative and accommodating." 



93 



-31- 



Staf f . Administrators expressed satisfaction with their staff, 
who were described as well-trained, well-utilized, honest, conscientious, 
and diligent. One administrator cited "the dedication and performance of 
the supervisor and staff in the face of insurmountable odds. In spite 
of bureaucratic red tape and the myriad of other obstacles, they have 
made this program work to the general satisfaction of the recipients." 

Accountability for Cash and Coupons . Administrators indicated 
that accountability porcedures are working well in their areas. Stated 
one: "If issuance procedure is followed as instructions dictate, cash 
and coupons are totally accounted for. We have had [over $5 million! 
in cash and coupons go through two cashiers' hands in the Federal 
fiscal year of 1975 with only $118.75 unaccounted for." 

Manual (Handbook) and Forms. Administrators stated that the 
Food Stamp Certification Manual adequately facilitates the work of 
the certifying officer. Revisions in the manual and forms were 
commended. Said one administrator: "The revised manual is an improve- 
ment over the old manual. Easier for caseworkers to use--and more 
practical . " 

USDA Monitoring/Quality Control/Audits. These activities were 
seen as aiding in the implementaiton of correct procedure by identi- 
fying problem ares and suggesting needed change. Said one State 
administrator: " [USDA] audits are a great help in identifying actual 
and potential problem areas and carry weight in having local departments 
initiate corrective action." Another administrator described Quality 
Control as "an essential part of the program as long as findings are 
not misrepresented." 

Relations with State agency . Local administrators found the 
State agencies to be cooperative, helpful, and responsive to local 
needs. Said one: "Whenever a problem has arisen, there has been 
immediate accessibility to someone at the State level." 

Fair Hearings . Typical was this response: "The present system 
for fair hear.ings is a good system and it operates well in our area. 
People must have the right to be heard if they feel they have been 
treated wrongly." 

PA/SSI Certification . Administrators observed that the categorical 
eligibility of public assistance and non cashed-out SSI households 
allows for a food stamp certification process that is short and suffic- 
ient. Said one State administrator: "Certification of these persons 
is greatly simplified compared to nonpublic assistance households." 

Outreach . Administrators felt that outreach in their area was 
successful in reaching potential eligibles. "Over the past two months, 
stated one administrator, "we have been getting a lot more of the 
elderly persons into the program and this is due to the outreach program 
that we have established." 



94 



-32- 

Variable Purchase Option . This option was felt to best serve 
recipients and to be necessary for participation in cases where 
recipients are unable to afford the full purchase price. Said one 
administrator: "[It] helps them to manage their budget more efficient 
It also allows them the option of not purchasing the entire allotment 
if they have stamps left from prior months or have an unexpected 
emergency . " 

Coupon Allotment. Administrators indicated that the stamp 
allotment, as adjusted semi-annually to reflect changes in the cost of 
food, is adequate to meet the needs of participating households. 

Work Registration . Mentioned as satisfactory were that this 
procedure allows for administrative sanctions against at least some 
voluntarily unemployed recipients and that it provides a service to 
jobseeking recipients. 

By comparing the number of times aspects of the program were 
listed as problems and satisfactions in this and in the preceding 
question, it is possible to derive a list of those aspects of the 
program viewed relatively more favorably than negatively by respond- 
ents. Only coupon issuance and recipient benefits were so viewed by 
both State and local administrators. Also mentioned more often as 
satisfactory than as problematic by the State administrators were: 
the coupon allotment, as adjusted semi-annually; fair hearings; 
and program funding. Relatively satisfactory to local administrators 
were: the variable purchase option; accountability for cash and 
coupons; and relations with the State agency. 

X . Program Abuse 

Adminstrators were asked to identify the major problem areas 
of the program in connection with illegal program abuse. The areas 
listed on the questionnaire were alteration of ATP cards; black 
marketing; couterf ei ting ; eligibility worker fraud; issuance worker 
fraud; mail thefts of household allotments; purchase requirement 
loans to recipients by retail store owner/operators; recipient 
certification fraud; thefts of ATP cards; and thefts of bulk coupons. 

The one abuse problem identified most frequently by all 
administrators was recipient certification fraud, identified almost 
twice as often as any other abuse problem by State administrators 
(56%) and more than twice as often as any other abuse problem by local 
respondents (52%). Next most frequently mentioned by both State (29%) 
and local (20%) administrators was the problem of abuse through black 
marketing. Mail thefts of household allotments was cited as a major 
problem by 23% of the States, but only 7% of the local administrators; 
it was the third most frequently cited by both groups. 



95 



Program Abuse 



-33- 



STATES 



Recipient Certification 
Fraud 

Black Marketing 

Mail Thefts of Household 
Allotments 



Number 



11 



Theft of ATP Cards 6 

Purchase Requirement Loans by 
Retail Store Owner/ 

Operator 4 

Counterfeiting 3 

Issuance Worker Fraud 3 

Eligibility Worker Fraud 2 



56% 
29% 

23% 

13% 

8% 
6% 
6% 



LOCAL 



Number 



Recipient Certification Fraud 



Recipient Certification 197 52% 
Fraud 

Black Marketing 74 20% 

Mail Thefts of Household 

Allotments 25 7% 

Purchase Requirement Loans by 

Retail Store Owner/Operator 20 5% 

Theft of ATP Cards 9 2% 

Eligibility Worker Fraud 7 2% 

Issuance Worker Fraud 4 1% 

Alternation of ATP Cards 3 1% 

Counterfeiting 3 1% 



Administrators most frequently reported the existence of and 
described the types of fraud perpetrated during the certification 
process. They stated that some recipients did not report or under- 
reported income and resources, exaggerated their deductible expenses, 
and generally misrepresented the facts surrounding household cir- 
cumstances. Recipient failure to report changes in income or house- 
hold circumstances after initial certification was also cited in this 
regard. 



Administrators expressed frustration over a perceived lack of legal 
follow-up and timely enforcement against those suspected of commiting 
fraud. Some pointed to the difficulty of proving that a misrepresen- 
tation was intentional rather than unintentional on the part of the 
recipient; some pointed to insufficient time and effort devoted to food 
stamp recipient fraud on the part of law enforcement agencies; others 
pointed to difficulties in collecting claims filed against those recei- 
ving benefits (or excess benefits) due to incorrect presentation of 
household circumstances. 



Some respondents expressed the belief that inadequacies in the 
certification process itself contributed to the problem of recipient 
fraud. Insufficient verification and the related problem of insufficient 
eligibility worker time per case were cited in this regard. 



96 



-34- 

Frequently recommended was an increase in investigatory, 
enforcement, and prosecutory activity directed against fraudulent 
recipients. Some spoke to the need for additional federal (Justice 
Department or USDA) funding and enforcement. Publicizing of arrests 
and convictions was suggested as a deterrent; more effective claim 
collection procedures were called for, as was suspension of fraud- 
commiting recipients from the program in addition to any claims or 
charges filed against them. Also recommended by a number of admin- 
istrators was implementation of a more comprehensive and effective 
verification process, and the simplification of the entire certification 
process so as to cause less confusion to all parties involved while 
freeing up more worker time for verification and investigation. 

B. Black Marketing 

In their remarks concerning black marketing abuse of the food 
stamp program, administrators referred to instances of stamps being 
sold for cash or being used to purchase nonfood -- or even illegal-- 
items. A number reported that they were aware of rumors and anec- 
dotal accounts of black marketing but were unclear as to the extent of 
such activity. Cited by a few as contributing factors were retailer 
laxity in accepting coupons, lack of adequate investigation or enforce- 
ment, and the availability for illicit use of fraudulently obtained 
coupons . 

A greater investigatory and enforcement effort on the part of the 
States and USDA was recommended most often by those citing this 
problem. The institution of photo ID's; use of signed coupons; elim- 
ination of the purchase requirement; and cashing-out of the program were 
each recommended by a few respondents. 

C. Mail Theft of Household Allotmen t 

Administrators mentioned specific instances and/or dollar figures 
involved in loss of coupons through mail theft; they expressed their 
concern that such theft is likely to occur pending further implementatton 
of coupon mailing procedures; and they argued that this is a risky 
and difficult to control procedure. Recommendations included discontinu- 
ing all mailing in high crime areas; sending stamps by registered mail; 
implementing tighter security within the postal service; making public 
assistance withholding optional ;" and deleting this procedure entirely. 



97 



APPENDIX III 
Quality Control Non-Public Assistance Study 



99 



SCBCLHJS. KANS. 



VICE CHAIRMAN 
C DC LA GARZA. TEX. 
JOSEPH P. VIGORlTO, PA. 
WALTER B. JONES. N.C 
ED JONES. TENN. 



i WEAVER, OREG. 



BERKLEY BEDELL, IOWA 
MATTHEW F. MC HUGH, 
GLENN ENGLISH, OK LA. 
FLOYD J. FITHIAN. IND. 

NORMAN E. D AMOURS, 



2?ouse of lAepresentatiues 
Committee on Agriculture 

Room 1301, longtoortb Itfwst Office VuiRting 

ilia shin stem, D£. 20515 

August 1, 1975 



SPECIAL COUNSEL 



Dear : 

The House Committee on Agriculture has undertaken a 
comprehensive review of the Food Stamp Program. 

One of the continuing and most significant concerns about 
the program is the lack of information concerning characteristics 
of the participants. Of particular concern to the Congress is the 
number of students, participants involved in labor disputes, 
military personnel, and, more recently, families with high gross 
incomes who participate. 

In order to have better information about these matters, the 
Committee, with the cooperation of the Department of Agriculture, 
would like to make use of data that is routinely collected and 
reported as part of the Quality Control Program. Each month, nation- 
wide, about 7,000 active and 4,000 negative cases are reviewed for 
Quality Control purposes. A worksheet, FNS form 245, is filled out 
which contains the information necessary to determine the quality 
control error rate. That form also contains detailed information 
which could be used to provide answers to the questions referred to 
above. 

Because of the need to develop this information as quickly as 
possible, we have decided to look at the sample selected for the 
month of April since the FNS forms 245 should now have been 
completed for that month. Unfortunately the information on students 
may not be as good as we would like because states were implementing 
the revised regulations affecting students from non-needy homes at 
different times during the spring. Therefore, we would also expect 
to ask you later on for the FNS forms 245 for a month in the fall, 
perhaps October. 



100 



In an effort to make this as simple as possible for you, we 
are asking that you reproduce copies of the FNS forms 245 for 
cases selected in the April, 1975, sample; and, with names and 
addresses deleted, send them to us. We will then transfer the 
information here into machine-readable form for automated 
processing . 

There is some question about whether or not we could identify 
from the FNS form 245 all those in the sample involved in labor 
disputes. Therefore, to insure accuracy, we would like for you to 
take whatever steps are necessary to provide a count of the number 
of participants so involved. Record the number of participants 
involved in a labor dispute in the lower right-hand corner of the 
first page of the FNS form 245 in the "Other Information" section, 
e.g., strikers-1. If no one is so involved, indicate "none", e.g., 
strikers-none. If there is no room inside the box, add the infor- 
mation immediately below it. 

If this information is available to you without a review of the 
case file at the local level, obviously that would be the most con- 
venient way to obtain it. However, if it is necessary to check the 
case files to be sure, please do so. 

Copies of the FNS forms 245 for the Quality Control sample of 
active and negative cases selected for April, 1975, should be sent 
to : 

James E. Springfield 

House Agriculture Committee 

1301 Longworth House Office Building 

Washington, D. C. 20515 

We would like to have the information as soon as possible, but 
no later than August 31. If you have questions, please call 
Mr. Springfield at 202-225-2171. 

We believe the results of this aspect of the study will be of 
substantial use to the Committee and to the Congress as it considers 
legislation in these areas. I shall very much appreciate your cooper- 
ation in assisting us by providing this information. 

With kind regards, 

Sincerely, 



Thomas S. Foley 
Chairman 



101 

HOUSE AGRICULTURE COMMITTEE 
April; 1975, Quality Control Non-Public Assistance Study 

TABLE OF CONTENTS 

Page 



Summary and Conclusions 1 

General Household Characteristics 2 

Income 3 

Deductions 5 

Special Status 7 

Characteristics of the April, 1975, Food Stamp 
Caseload Preliminary Report 

Introduction 10 



Table 1 

Selected Income, Deduction and Household 
Characteristics by Typical Food Stamp 
Household Types 14 

Table 2 

Average Income Levels of the Participating 
April, 1975, NPA Caseload by Selected 
Household Characteristics 29 



Table 3 

Percent of Cases with the Following 
Items by Selected Household Character- 
istics 31 



Table 4 

Average Income Levels of the Participating 
April, 1975, NPA Caseload by Selected 
Characteristics — Excluding those House- 
holds with no Income Amount by Source 33 



Table 5 

Percentage Distribution of Gross Certi- 
fied Income by Poverty Level Guidelines 
for Families and Selected Household 
Characteristics — April, 1975 NPA 
Caseload 35 



Table 6 

Percentage Distribution of Gross Reviewed 
Income by Poverty Level Guidelines for 
Families and Selected Household Character- 
istics — April, 1975 NPA Caseload 37 



102 



Table 7 

Average Deduction Levels of the Partici- 
pating April, 1975, NPA Caseload by 
Selected Household Characteristics 39 



Table 8 

Percent of Cases with the Following 

Deduction Items by Selected Household 

Characteristics — April, 1975 NPA 

Caseload 42 



Table 9 

Average Deduction Levels of the April, 
1975, NPA Caseload by Selected Household 
Characteristics — Excluding those House- 
holds with no Deduction Amount by Type 
of Deduction 45 



Table 10 

Average Deduction Amounts by Gross Food 

Stamp Income April, 197 5, NPA Caseload 48 

Table 11 

Percent of Households Receiving Deduction 
Amounts by Gross Food Stamp Income — April, 
1975, NPA Caseload 51 

Table 12 

Cumulative Percentage Distribution of 
Total Monthly Deductions by Selected House- 
hold Characteristics — April, 1975, NPA 
Caseload 54 

Table 13 

Extent of Student and Striker Participation 

in the Food Stamp Program -- April, 1975, 

NPA Caseload 57 

Table 14 

Selected Income, Deduction and Household 

Characteristics of Food Stamp Participants 

in the United States vs Puerto Rico 59 

Technical Appendix A — Description of the Food 
Stamp Quality Control Program and Data Processing 
Procedures 68 



103 



Technical Appendix B -- Description of the Weight- 



ing Procedure and Description of the Problem of 

Non-Response 78 

Weighting Procedure 78 

Non-Response 7 8 

Sample Sizes, Incompletes and Non-Response Rate 

by Individual States (Table B.l) 80 

Sample Sizes, Incompletes and Non-Response Rate 

by United States vs Puerto Rico (Table B.2) 84 

An Ideal Non-Response Study 8 5 

Current Evidence (Table B.3) 8 5 



1 



105 

-l- 

SUMMARY AND CONCLUSIONS 
April, 1975, Quality Control Non-Public Assistance Study 

The following are highlights of the House Committee on 
Agriculture's study of food stamp recipients based upon the 
April 1975 Quality Control sample. Initially, a letter was sent 
out to all 50 States, District of Columbia, Puerto Rico, Guam, 
and the Virgin Islands, requesting that the forms (Form FNS 245) 
used in the reviewing process for the April sample be forwarded 
intact to the Committee. Upon receipt of these forms, the 
information was tabulated in accordance with established statis- 
tical and data processing procedures which are described in 
Appendices A and B. This summary is divided into four separate 
categories: general characteristics, income, deductions, and a 
section on special status describing the incidence of students 
and strikers. All cases have been appropriately weighted and 
projected to National totals, percents and means. As one peruses 
the following information, four things should be kept in mind. 

(1) All income and deduction information refers to one 
month, namely, April 1975, and not to income or deductions of a 
household for an entire year. 

(2) These statistics only represent the non-public assist- 
ance caseload (NPA) . A brief definition of a NPA household is one 
in which at least one member is not a recipient of a federally- 
aided public assistance grant. The NPA cases represent 56.1% 

of all cases of the month of April. 



106 

-2- 

(3) All tables include Puerto Rico which is different 
from the other states with respect to race, level of deductions 
and other characteristics. 

(4) The information comes from a quality control form 
meaning that for some data fields, two estimates are available. 
On the form entries for wages, welfare, family size, rent, 
child care, etc. as reported to the certifying office at the 
time the application for food stamps was made are available. 

In addition, there are the entries for these same categories 
as reviewed by another individual at a later date (usually 
15-45 days after April) . This duplicate set of information 
is available primarily on income and deductions on 91.2% of 
the cases forwarded to the Committee. At the time coding began 
it was decided to code summary information for both the certi- 
fying offices and the reviewing office (i.e. gross income, 
gross deductions, family size, purchase requirement and bonus 
amount) . The detail information making up these totals 
would only be coded for the reviewing officer. For those cases 
where the review has not been completed, the detail as given 
to the certifying officer is coded. All tables have been 
labeled as to what information (certifying or reviewing) is 
used. 

General Household Characteristics 

Approximately 54.4% of the household heads are white. 
Another 25% of the heads of households are black and 15.7% 
are Spanish-surnamed , the latter being primarily in Puerto 



107 

-3- 

Rico. The remaining number are Indian, Oriental, and other 

nationalities or families whose race was not identified on 

the form. Approximately 60% of the households are male-headed. 

For age of the head of household, the non-public assistance 
(NPA) caseload has roughly the same frequency in each age* cate- 
gory with a slightly higher frequency or percentage of cases 
65 years of age and over. Approximately 25% of the caseload is 
65 and over with another 14% being 55 and over. 

Slightly less than 50% of all non-public assistance food 
stamp families are one and two members. Another 35% of the 
caseload have family sizes between three and five, with 16% of 
the caseload having family sizes of six and above. 

Thirty-five percent of the families own their own home, 
with approximately half of those (17.7% of the entire case- 
load) reporting no mortgage payment. 

Income 

The average gross countable ( i.e . , not including excluded 
income) food stamp income as reported to the certifying officer 
is $264 per month. Gross income as determined by the review- 
ing officer increased an average of $41 to approximately $305. 
This change is due to mistakes made in the original certifying 
process as well as differences resulting from the comparison 
of estimates of anticipated incomes at the time of certifi- 
cation with known incomes at the time of review. Gross income 
is composed primarily of three items: wages which average $136, 



75-969 O - 76 - 8 



108 

-4- 



Social Security and other governmental insurance plans which 
average. $100 and Supplemental Security income which averages $28. 
Approximately 35% of the families reported having wage income 
and 3.6% of the families reported self -employment income. Average 
level and composition of gross income vary considerably by type 
of household. For example, the elderly have very few wages. 

Approximately 6% of the families had zero income. Because 
family sizes tended to be one and two-member households, a large 
percentage (48%) of the food stamp households have gross monthly 
incomes of $215 or less. This is roughly equivalent to the poverty 
line for a one-member household. An additional 27% of the NPA case- 
load has income less than $360 per month. 

On the basis of gross income, as reported to the certifying 
officer, two-tenths of one percent of all NPA households had 
incomes over $1,000 per month. However, the best way to address 
the question of incidence of high income food stamp recipients is 
by comparison with the poverty line. Using income as reported to 
the certifying officer, 18.1% of the caseload had incomes in 
excess of the poverty line. 7.2% of the sample had incomes in 
excess of 125% of the poverty line. 

These statistics change when income as determined by the 
reviewing officer is used. The equivalent statistics show 
26.5% of the caseload above the poverty line with approximately 



109 

-5- 

13.8% of the caseload above 125% of the poverty line. This 
concept of poverty income is based upon a one-month account- 
ing period. It does not show the incidence of high income 
families in the program if a full one-year accounting period 
were used. It is quite likely that some of these people that 
were below poverty for the month of April would have higher 
than poverty-level earnings on the basis of a 12-month ac- 
counting period. The reason for this is simply that a signif- 
icant percentage of low income households have fluctuating 
incomes from month to month. 

Deductions 

The average level of deductions is approximately $82 per 
month with little difference between the amounts determined by 
certifying and reviewing officers. The largest component of 
deductions is shelter, which accounts for an average of $36 
per family. The next largest component is work-related ex- 
penses which averages $27. These work-related expenses are 
composed of income and payroll taxes ($17.42), work allowance 
($8.41), mandatory retirement payments ($.86), and union dues 
($ .38). Medical expenses ($12.40), child care ($1.60), and 
all other deductions ($1.70) make up the remainder of allow- 
able deductions. 

Another important finding of the study is that deductions 
do vary widely. For example, if a standard deduction of $90 



110 



-6- 

was chosen with the remainder of the program left unchanged, 
roughly 53% of current NPA program households would have their 
bonus increased by over $9 with 24% of the NPA caseload having 
their bonus cut by $9 or more. Also, as one would expect, the 
average level of deductions varies by household characteristics. 
Deductions increase with family size -- being approximately 
$49 for a family size of one and increasing to $114 for families 
having from four to six members. The level of deductions is 
also related to age. For those families whose head is 65 and over 
the average deduction is only $40, while the average deduction 
for those households where the head's age is 14-34 is $114. Most 
of this difference in the average level of deductions with re- 
spect to age and family size is due to work-related expenses. 
This implies that a standard deduction, all other provisions 
remaining identical to the current program, would benefit the 
aged, small sized and low income households, while hurting the 
larger, younger, higher income but probably working households. 

Another important, but not surprising, finding is that the 
level of deductions increases with gross income. For example, 
for families whose gross income is between $100 and $215, the 
average level of deductions is $42.34 while for families whose 
gross income is between $490 and $559, the average is $142.41 or 
a difference of $100. The majority ($60) of this difference is 
accounted for by changes in work-related expenses (not including child- 
ren). Another $15 is accounted for by increases in medical expenses (part of this 



Ill 



-7- 

can be attributed to medicare availability for the elderly) , 
$6 by increased tuition, $7 by increased shelter, and $12 by 
other expenses. 

Special Status 

Approximately 5.6% of the households have a college student 
present. This is approximately 185,000 families out of a 
total of 3,312,000 NPA households. There are 204,700 students 
in these households. 75% of the households with a college stu- 
dent are headed by a college student. 

Another 1.2% of the households had a student going to an 
elementary or secondary school. Under current food stamp regu- 
lations, a family is entitled to deduct tuition regardless of 
the kind of school a child attends. The total percentage of 
food stamp bonus going to college students is approximately 
4.9% and the percentage of bonus dollars going to families 
with elementary or secondary students is 1.6%. If the tuitior 
deduction was not allowed under the current food stamp program, 
an upper bound on the estimate of cost savings would be ap- 
proximately $34.6 million per year. 

The percentage of strikers in the sample is .2%. This 
is an extremely low percentage and raises questions about the 
validity of the study with respect to the incidence of striker 
question. Both student and striker information had to be de- 
duced. There was no question which directly interrogated the 



112 



-8- 

recipient as to their status vis-a-vis these special interest 
groups. Striker identification is usually possible, but not 
always, by determining if the household received strike benefits 
or by notes made by the reviewing officer in the work registra- 
tion portion of the form. Information from the August 1975 Current 
Population Survey also indicated a percentage of approximately 
.2%. Out of 44,733 households sampled in August, 2,688 were 
on the food stamp program. Five of these food stamp households 
were identified as having strikers which, when weighted ap- 
propriately, implies a percentage of .202%. Stated differently, 
based upon statistical methodology, we can be 95% confident 
that the percentage of households with strikers is less than 
.35%. 

Student identification was accomplished by determining if 
a tuition deduction was taken, a scholarship reported as in- 
come or the work registration requirement exempted because 
the individual was a full-time student. Again, given this pro- 
cedure, it is possible to miss students. However, this is not 
likely to have happened often because the reviewing officer 
had to carefully review all cases where the work registration 
was exempted. It should be remembered that the percentages 
for students cited above are for the NPA caseload. 



113 



-9- 

Other controversial groups, such as migrant workers and 
number of households receiving military pay, was not capable 
of being addressed in this study given the information on the 
quality control review form. 



114 



-10- 

Character istics of the April, 1975, Food Stamp Caseload 
Preliminary Report 

Introduction 

The purpose of this study is to provide information to 
policymakers about the current food stamp program. Questions 
about the incidence of strikers, students, high income families, 
and average level of deductions are typical of the questions 
which are addressed in this study. 

For this study to be completed within a relatively short 
time span and without a huge cost, an existing data source 
had to be tapped rather than designing a survey from scratch. 
The only existing data source capable of providing answers 
was the quality control sample. This data as compared to 
census data (current population surveys) , Chilton or other 
survey data has the distinct advantage of being representative 
of what actually took place on the program. It does not ask 
questions of recipients themselves as to what their income, 
deductions, bonus or family size are but obtains the informa- 
tion from the certifying officer. In addition, 91.2% of this 
sample has had its income, deduction and other basic program data 
verified by a reviewing officer. The reviewing officer spends 
an average of twelve hours per case interviewing the family 
and verifying income and deduction information with outside 
sources. This is a much more intensive data collection pro- 



115 

-li- 

cedure than any other survey. This data is probably the best 
source of income and deduction information on food stamp (NPA) 
households . 

The basic form used by the reviewing officer is Form 
FNS 245. It contains both certifying and reviewing officer 
information. The entire quality control sample (6,045 cases) 
for the month of April was forwarded to the Committee. Upon 
arrival, each form was checked for legibility. Each form 
was also checked to ensure that the review month was April 
and that the form was complete. Each form was coded and all 
of the coded information was verified by another individual. 
After the keypunch and verify operation, each case was checked 
by a computer automated edit program. For example, the pur- 
chase requirement was checked against the April, 1975 purchase 
requirement table. If a mistake was found, the family size, 
income and purchase requirement fields were examined and one 
of the fields changed to correct the mistake. The interested 
reader is referred to Appendix A for a complete description 
of the data processing procedures. Finally, after all cases 
had passed the edit inspection, a check was done which verified 
that each family was present that had been originally sent to 
Washington. Essentially, this ensured that all forms have 
been coded once and only once. 

Since the quality control review is a simple random sample 



116 

-12- 

within each state, the task of projecting this sample into 
National totals, means or percents is relatively straight- 
forward. The weight attached to each observation from the 
i tn state is equal to the total NPA cases in that state from 
the month of April (obtained from USDA records) divided by 
the number of cases in the processed data file. Two potential 
problems arose which may alter statistics slightly. No in- 
formation is available for three states, namely, Indiana, 
Michigan, and Alaska. It is assumed that these states are 
identical to the average of all the other states' character- 
istics. Even if the omitted states are somewhat different, 
they would have to be drastically different to alter national 
statistics by more than 1 or 2%. The entire NPA sample for 
the month of April is over 7,000 cases of which we received 
only 6,045. The cases not received were not forwarded for 
a variety of reasons (e.g. , unable to locate the household, 
the household moved out of the state after April, death of 
head in a single member unit, or families being unwilling to 
cooperate) . Essentially, it is assumed that these cases are 
exactly like the cases in the sample. For example, it is 
assumed that the number of elderly families excluded is pro- 
portional to the number of elderly families actually in the 
sample. To the extent that this is not true, our statistics 
will be slightly biased. If the excluded sample is radically 
different, then the statistics in the report will be misleading. 



117 

-13- 

There is no evidence that this happened. This question is 
addressed further in Appendix B and will be explored further 
in a final report. 

The remainder of this report is organized by table. 
After a brief description of the contents of each table, the 
answers to the more important policy questions within each 
table are highlighted. These tables have been designed such 
that they can be studied or read without supporting text. 



118 



-14- 

Table 1 

Table 1 is a summary table separated by typical food stamp 
household profiles. These profiles were not intended to cover 
the entire caseload or necessarily be mutually exclusive. They 
were selected to illustrate that overall averages can be 
misleading and to separate out several groups of special interest 
to the Committee. The entire NPA caseload is described in 
Column one. Column two refers to male-headed families, spouse 
present, with two children. Column 3 contains all families with 
6-8 members. Column 4 is only those families who are headed 
by a college student while the final column refers to one or two- 
member households where the household head is greater than or 
equal to 60 years of age. For ease of exposition, Table 1 has 
been subdivided into 9 tables (A - I) . 

The first two rows of information in Table 1 A are the 
percentage of the caseload in terms of households and percentage 
of bonus dollars received respectively by the different household 
profiles. Male-headed families with a spouse and two children 
comprise 8.3% of the households but 10.7% of bonus dollars. Six 
to eight-member households comprise 12.4% of the households and 
23.6% of the bonus dollars; college students are 4.2% of the cases 
and 3.2% of bonus dollars while the elderly represent 30.0% of 
the cases and 12.2% of the total bonus dollare received by the 
NPA food stamp population. 

For the entire caseload approximately 54.4% are white, 
24.9% are black, 15.7% are Spanish-surnamed , with the remainder 



119 



-15- 




120 



-16- 



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-17- 




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--18- 

primarily not known from the form. College students are 
primarily white, 70.2% versus 16.1% non-white, and large 
families are primarily non-white. 

Families are male-headed 59.6% of the time. Most of the 
large families are male-headed, as are the college students. 
For the elderly, more families are female-headed, which also 
implies that they are single member units. 

Age of the head (Table 1 B) for the entire caseload is 
roughly evenly distributed among the different categories with a 
slight increase in the percentage that are age 65 and over. 
Approximately 25.5% of the sample is greater than or equal to 
65 years of age. An additional 14.2% of the caseload is between 
ages 55 and 64, while 9.5% of the sample is less than 24 years of 
age. Most, but not all, of the college students are young while 
most of the heads of large families are in the 35 - 44 age bracket. 
Each of the columns total to 100%. Thus, one must interpret 
the 29.1% in the fourth column under college student and in the 
row labeled 25 - 34 year age bracket as the percent of all 
college students who are 25 - 34 years of age. This must not be 
interpreted as 29.1% of the 25 - 34 year age bracket going to 
school. College student is slightly misleading in that any head 
of household taking courses beyond the high school level would 
be classified as a college student. This would include technical schools 
or individuals taking one or two courses at night at a nearby community college. 

Households with college students represent 5.6% of the entire 
caseload (Table 1 C) . An additional 1.2% of the households have 
dependents attending elementary and secondary schools for which 



123 



-19- 

they are receiving tuition deductions. 

Family size is dominated by one and two-member households. 
Slightly less than 50% of all NPA food stamp households have 
under two members with one-member units constituting almost 
33% of the entire sample. 

Very few questions about assets are available on Form 245. 
Home ownership is one resource characteristic which was available 
and it indicates that 35% of the entire caseload own their home with 
approximately 50% or 17.7% of the entire caseload reporting no 
mortgage payment for the month of April. 36.4% of the elderly 
own their home with 28.8% reporting no mortgage payments. 
48.4% of the large families own their home while 7.7% of college 
students own a home. 

The next group of numbers (Table 1 D) indicates the number 
of people that are over the poverty level based upon gross 
certified income. It indicates that for the entire sample 
roughly 18% of the entire caseload is greater than the poverty line. 
32% of the male-headed families of four are above the poverty line; 
34% of the college students are above poverty; 17% of the large 
families and 11% of the elderly families are above the poverty 
line. The percentage in excess of 125% of the poverty line for 
the entire sample is 7.2% while for the elderly this percentage 
is 2.6%. 

Table 1 E describes the distribution of deductions. It 
shows that for the entire sample roughly 18.7% do not take 
any deductions, and 17.4% have deductions between the levels of 
$1 and $30. Approximately 17.9% had deductions greater than $150 
for the entire sample. 4.1% of the elderly had deductions 



75-969 O - 76 - 9 



124 

-20- 




1 1 



t I 
s & 



A' 



125 



-21- 

exceeding $150 while 35.7% of the male-headed families with two 
children present had deductions exceeding $150. 

The next set of information (Table 1 F) relates to distribution 
of gross income. It indicates that 5.8% of the households had 
no earnings or other sources of income for the month of April. 
Most of the families are below $215 of income per month which is 
roughly equal to the poverty line for one-member households. The 
preponderance of families at this gross income level is due to the 
high percentage of one and two-member households which are primarily 
the elderly. The number of families above $360 per month, or 
approximately 4,200 per year, represents . 2 4 . 4 % of the caseload. 
The number over $1,000 per month is .2%. 

Table 1 G refers to mean income and expense amounts for the 
different family profiles. It shows that the overall average 
gross food stamp income for the entire caseload is $264.32. 
However, for the elderly, the average is $182.63 while the average 
for the large families, 6-8 members, is $414.24. Total deduct- 
ible expenses on the average also vary by these different household 
types. It shows that the average for the entire caseload is 
approximately $82.45, the average for the elderly is $42.58, 
while that for the large families and the male-headed two children 
present is in the range of $120. College students have the 
highest level of deductions ($142), primarily because of tuition. 
The subtraction of gross food stamp income minus total deductible 
expenses gives net food stamp income, upon which the purchase 
requirement and bonus coupons are determined. This is an 
average of $185 for the entire caseload, reflecting a low of $141 
and $109 for the elderly and college student, respectively, and a 



126 




127 




128 

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132 



-28- 

9.4% receive public assistance grants and 21.5% receive other 
income. Overall 95.6% of the families have some income. 

The largest single deduction overall is shelter which 
averages $35.94; work-related expenses are $27.06; medical, tuition, 
child care and other deductions are a total of $19.09, for an 
average deduction of $82.08 for each household. Average deductions 
are the largest ($150.46) for college student families and lowest 
for the elderly ($41.41). 



133 



-29- 

Table 2 

Table 2 displays average income levels by household size 
and age of head. The average total gross countable income is 
$304.56. The largest component is wage income accounting for $135.74 
on the average followed closely by governmental insurance plans 
of $100.01 per household. Governmental Insurance plans include 
Social Security, Unemployment Insurance and Veterans' Benefits. 
Supplemental Security Income averages $27.63, with other welfare 
primarily AFDC, GA of $13.03, self-employment income of $5.67 
and all other income averaging $22.51 making up the total. As one 
would expect, average household incomes vary by household size and 
age of the head. The average income for those over the age of 6 5 
is $221.79, while those between the ages of 35- 64 have an average 
income of $338.02. The typical income profile varies by age and 
family size. For example, for the elderly, very little of their 
income comes from wages with the majority of the income coming from 
Supplementary Security Income and Social Security — accounting for approx- 
imately 84% of all elderly household income. On the other hand, 
wages is by far the most important component for those households 
whose head is 64 or less. 



134 

-30- 



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135 



-31- 

Table 3 

Table 3 shows the percent of households receiving each 
of the itemized income items by household size and age of head. 
The first column shows the overall percentage of households with 
the selected income item. For example, 34.7% of all households 
had wage income; 3.6% has self -employment income; 4 8.6% had 
governmental insurance income of some kind; 25.7% had Supplemental 
Security income, while 9.4% has AFDC or other public assistance 
grants. 95.6% of all households has income of some kind or another. 
This implies that 4.4% of the households had zero income. As with 
Table 2, the percentage having the selected income items varies 
by age of head and household size. For families over the age 
of 64, only 6.8% had wage income while 78.5% of those were on 
some Governmental Insurance plan, and 59.7% were receiving Supple- 
mental Security income. For those families between ages of 35 - 64, 
39.3% had wage income. 



136 

-32- 



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137 



-33- 

Table 4 

Table 4 shows the average income levels by category for 
those families with the selected income category separated 
by family size and age of head classifications. By examining 
column one, one finds that for those families with wage income, 
the average wage income was $391.18. This table shows the 
importance of the various income items to the families which 
have the selected item. For example, while self -employment 
income averages only $5.67 and only 3.6% report self-employed 
earnings, for those households with self-employment income, the 
average is $157.50. 



138 



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139 

-35- 

Table 5 

Tables 5 and 6 are identical in that both tables array 
households as a percentage of the poverty level line by 
household size and age of head. The low index for Table 5 
is created by multiplying the gross certifying income amount 
by 12 and dividing by the official OMB poverty guidelines which 
went into effect April 30, 1975. The first column of Table 5 indicates that 81.9% 
have incomes less than the poverty line. 10.8% have incomes 
between 100 and 125% of the poverty line, and 4.3% have incomes 
between 126% and 150% of the poverty line. It must be remembered 
that this percentage of poverty line is based upon April 
income only. It is quite likely that some of the families who are 
below poverty in this table could have higher earnings in 
the remaining months of the year and, consequently, if a 12- month 
accounting period or a calendar-year income estimate was used, 
a higher percentage of families would have incomes above the 
poverty line. 



75-969 O - 76 - 10 



140 



-36- 




J 41 



-37- 

Table 6 

Table 6 is identical to Table 5, except that it uses 
reviewing officer's estimates of income, rather than cer- 
tifying. Only families where the income review has been 
completed have been included in the table. Because the 
reviewing officer on the average found more income, one would 
expect the percent below poverty to fall, which it has. The 
number of families less than the poverty line is 73.9% compared 
to 81.9% for the certifying officer. The number greater than 
150% of the poverty line for the reviewing officer is 7.7 % as 
compared with 2.9% for the certifying officer. Perhaps the 
best way of interpreting the difference between the two tables 
is remembering that the certifying officer's estimates probably 
come closer to what the real world will actually be like under 
similar program administration, and that the reviewing officer's 
estimates are probably more correct in terms of what the actual 
income level of food stamp families are. 



142 




143 



Table 7 -39- 

Table 7 shows the average deduction levels of the NPA 
caseload for all households and for households subdivided 
1 by size and age of household head. It should be noted that 
included in the average deduction dollar figures are those 
households who did not take the particular deduction ( s ) , as 
these are average deductions for all households. 

The average total deduction for all households is $82.09. 
Of this total, the largest deductions are for shelter expenses 
, ($35.94) and work-related expenses ($27.06). The latter is composed 
of taxes ($17.42), work allowance ($8.41), and other ($1.25). 
Medical expenses ($12.40), child care which could also be considered 
work related ($1.60), tuition ($3.39), and other ($1.70) make up 
the remainder of allowable deductions. 

The average total deduction decreases significantly with 
household age: those headed by a member 34 or younger 
took an average $113.89 deduction while those headed by a member 
65 or older took an average deduction of only $40.13. 

Excepting a small drop-off for households consisting of 
more than 6 members, the average total deduction increases 
with respect to household size: households of 4 - 6 members 
took an average $114.07 deduction, compared to 1-person house- 
holds' average of $48.98. 

Most of the difference in the average level of deductions 
with respect both to age and family size is due to differences 
in work-related expenses. For instance, of the $73.76 difference 
in total deductions between the youngest and oldest households, 



144 



-40- « 




145 



-41- 

$38.08 is accounted for by the difference in these groups' 
work-related deductions. Shelter costs account for another 
$28.10 of the difference. With respect to family size,* 
$44.54 of the $65.09 higher deduction taken by 4 - 6 member 
households compared to 1 - member households is accounted for 
by the work-related deductions. Again, shelter is the next 
most significant, explaining $10.27 of the difference in average 
deductions between these different household sizes. 

Tuition and child care are highest for households headed 
by someone 14 - 34 years of age. Medical costs are relatively 
constant with respect to age, but are approximately half as 
large for single-person households as for multiple-person 
households . 



146 



-42- 

Table 8 

Table 8 shows the percent of households that take the 
various deductions for all households and for households 
subdivided by size and age of household head. 

82.0% of all households in the NPA caseload took at least 
one itemized deduction. This percentage remains relatively 
constant across age and size characteristics. 

The single most frequently taken deduction is for shelter 
which is claimed by over one-half (57.5%) of the caseload. 
Next most frequently claimed deductions are for work-related 
expenses (35.4%), and for medical expenses (32.7%). Child 
care, tuition, and other deductions (including alimony payments, 
disaster, and casualty losses) are taken by only a small percentage 
of households; 2.5%, 5.3%, and 3.7%, respectively. 

Every deduction except those for tuition and for shelter 
tends to be claimed more frequently by larger than by smaller 
households. The percent of households claiming a shelter deduc- 
tion declines with respect to household size. This is in part 
accounted for by the nature of food stamp eligibility standards 
and the shelter deduction itself. Income eligibility standards 
are much lower for a smaller size household than for a larger 
one, and only those shelter costs greater than 30% of net income 
(gross income minus all other deductions) can be deducted. 
Thus, it is very likely that a single person would have shelter 
costs higher than $58.20 representing 30% of his maximum allowable 
net income, and it is somewhat less likely that a 4-person house- 



147 



-43- cn 




148 

-44- 

hold would have shelter costs higher than $153.90, representing 
30% of its maximum allowable net income. Table 8 indicates 
that 68.4% of 1-person households were able to claim a shelter 
costs deduction, compared to 52.8% of 4 - 6 person households and 
only 36.3% of the largest households. 

Every deduction, with the exception of medical expenses, 
is less likely to be claimed by an older than a younger household. 
The percentage of households taking the work-related deductions 
declines most dramatically, from 54.6% for the 14 - 34 group to 
39.8% for the 35 - 64 group and only 7.0% for the 65 or older 
group. Tuition deductions are more than twice as likely to be 
claimed by younger households than by the caseload as a whole 
(12.0% as compared with 5.3%). The fact that the percent of those 
taking shelter deductions decreases with age of household head 
can partially be explained by realizing that nearly one-third 
of households age 65 or older reside in homes they own debt-free. 
Consequently, they have few out-of-pocket expenses to report each 
month and thus a lower percentage are eligible for the shelter 
deduction . 



149 

-45- 

Table 9 

Table 9 is similar in scope to Table 7, except that 
in calculating the average deduction levels for this table, 

ind 

those households not taking the given deduction (s) were ex- 
cluded. This table shows the average deduction for those 

households taking the deduction. 

'Id. ; % 

This table can be read in conjunction with Table 8, 

which shows what percent of households are taking each of the differ- 
ent deductions. For example, from Table 8 it can be as- 
certained that 53.5% of households headed by someone age 
14- 34 took a work allowance deduction; Table 9 then shows 
that the 53.5% in this age group who took this particular 

ose I 

deduction had an average of $24.54. The $13.13 average work 
allowance deduction for the age 14 - 34 group in Table 7 is 

much lower, of course, because it includes the nearly half of these 

e.j B 

households who did not claim any work allowance deduction. 

ch 

From Table 9 it can be seen that some of the deductions 
that appear relatively insignificant on Tables 7 and 8 do bear 
i significantly on the net income of those households that 
actually take the deduction. 



151 

-47- 



The average total deduction for those who take at least 
one deduction increases with household size and decreases with 
household age. Single-person households claim, an average $62.96 
in deductions, while multiple-person households claim over $100. 
Note that from Table 8 the percentage of single-person house- 
holds claiming at least one deduction is approximately the 
same as that for larger households. The largest single factor 
in this difference is the increased work-related deductions 
claimed by larger households. This is to be expected, since 
larger households can qualify for food stamps at higher income 
levels than can single-person households, and the higher the 
income, the more likely it is earned income which implies higher 
axes and other work-related expenses. 



152 



Table 10 

Table 10 shows the average deduction amounts taken by 
households according to households' gross monthly income. Here as 
in Table 7, the average deduction includes all households in the 
caseload . 

As would be expected, the average total deduction increases 
as gross income increases. The largest single factor accounting 
for this increase is in work-related deductions. For example, 
households in the mid-$400-a-month income bracket take an average ; 
deduction of $104.25, while households with an income in the 
mid-$200's take an average deduction of $60.77. Of the $43.48 
difference between the two income groups, $37.97 is accounted 
for by the higher work-related deduction by the mid-$400 households 

Also, in part, the higher average deductions for higher 
gross income households is to be expected due to the nature of 
food stamp eligibility standards. At the higher income levels, onlj "•• 
those households who are able to claim relatively large expenses li: 
for deductions will generally be able to qualify under the 
program's net income eligibility standards. This implies that the highe: 
income households are to a degree a self -selected sample with 
respect to level of deductions. 

From Table 10 it can be seen that higher income households do not on 
the average take larger shelter cost deductions than lower income 
families. Average shelter deductions appear to neither increase 
nor decrease with respect to monthly gross income. The different 
deduction amounts for shelter taken at each income level may be 
due to sampling variations and other factors unrelated directly 
to income. 



153 



■49- 



It may appear puzzling that households with zero gross 
Income claim an average of $41.92 in deductions. It is unknown 
whether the reviewing or certifying officer questions carefully 
:or deductions when income is zero. If not, actual deductions 
/hich could be taken if income rose are probably understated, 
'his in turn could understate the true average deduction slightly, 
liven the size of the average deduction for zero gross income 
ouseholds, the understatement is probably small. This deduction 
mount for zero-income households merely represents the certifying 
|,r reviewing officer's calculation of what deductible expenses these 
ouseholds did experience, even though they were not actually 
educted. All but $4.33 of the zero income group's average "deduc- 
ion" comes from shelter costs, so in effect their average "deduc- 
|ion" equals the average shelter costs for these households (since 
t zero income, all shelter costs would be deductible). 



154 



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-51- 

Table 11 

Table 11 complements Table 10 and shows the percent of 
households who take deductions by the level of household monthly 
gross income. 

The percent of households taking at least one deduction 
increases with monthly gross income. With the exception of zero 
income households, three-quarters of the low income 
groups ($1 - $215/month) take some sort of deduction, while 
nearly all households with incomes above $600 a month take a deduc- 
tion . 

Most strikingly related to increased income is the incidence 
of work-related deductions. For example, only 20.9% of the $216- 
$284 income group claim work-related deductions, but four times 
as many (85.9%) of the $560 -$624 group claim them. The incidence 
of other deductions is greater (but less so) in the $560 -$624 
group as compared with the $216 - $284 group. 

As explained in the description of Table 10, the increased 
percentage of households taking deductions at higher income levels 
is to be expected partly due to the nature of food stamp eligi- 
bility standards, because at these income levels most households 
will only be able to qualify for food stamps (and thus show up in 
our sample) if they are able to claim some deductions. 

The percent of households taking a shelter deduction is 
the only one which declines, slowly but steadily, with increased 
income. This is largely due to the nature of the shelter deduction 
itself, which, as explained in the description of Table 8, is 



75-969 O - 76 - 11 



156 



-52- 




157 

-53- 



allowed only for that portion of shelter costs exceeding 30% 
of net income. It is clearly more likely that a household 
with income of, say, $100 -$200 a month will experience 
shelter costs greater than 30% of its income than a household 
with an income of $600 -$700 will experience shelter costs 
greater than 30% of its income. 



158 



-54- 

Table 12 

Table 12 gives the cumulative percentage distribution of 
total monthly deduction amounts, in dollars, as taken by all house- 
holds and by households according to size and age of head. In 
other words, the table shows what percent of a given type house- 
hold takes less than x dollars in deductions. 

For all households (the "overall percentage"), 18.7% take no 
deduction whatsoever, approximately one-third (36.1%) take $30 
or less, approximately half (53.0%) take $60 or less, two-thirds 
(66.6%) take $90 or less, and three-quarters (75.8%) take $120 
or less in monthly deductions. 

From Table 12 it can be estimated that if a standard 
deduction of $90 was implemented, with the remainder of the pro- 
gram left unchanged, 53.0%* of current program NPA households 
would have their purchase price decreased by over $9, and 24.2% 
would have their purchase price increased by over $9. These 
figures can be determined because for every $1 change in net 
income there results roughly a $.30 change in the food stamp bonus 
(i.e., the benefit reduction rate is roughly 30%). Therefore, 
households currently claiming total deductions between $61 and $120 
would find their purchase price reduced or increased by less than 
$9. It should be noted that even a $9 or less change in the 
purchase requirement may represent a significant reduction or 
increase in benefits for some households, particularly smaller 
households . 

With respect to household size, Table 12 shows that if our 
hypothesized $90 standard deduction was implemented, smaller 
households would stand to gain. With the $90 deduction, *68.7% 



159 



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160 

-56- 



of single-person households would gain over $9 (i.e., would have 
their purchase price reduced), and only 8.6% would stand to 
lose over $9. But for 4-6 person households, only 39.3%* 
would gain over $9 with the $90 deduction, while an almost 
equal number, 36.5%, would lose over $9. 

Again using a $90 standard deduction as a measure 
of the relative effects of a standard deduction on households 
with different characteristics, a benefit of over $9 would 
accrue to 37.4%* of the 14 - 34 age group, to 49.4%* of the 
35 - 64 age group, and to 7.58%* of the 65 or older group. 
Conversely, benefits would be reduced more than $9 for 38.3% 
of the younger group, 2 5.7% of the middle group, and 6.7% 
of the oldest group. 



the percentage figures for households standing to gain by a 
$90 deduction are somewhat exaggerated here, because the 
figures include some households whose entire gross income 
is less than $90. 



161 



-57- 

Table 13 

Table 13 shows the incidence of college students and strikers in 
the Food Stamp program. The total number of households with 
a college student is 185,000 out of a total of 3,312 million NPA 
cases. This represents 5.6% of all NPA cases. The total number 
of bonus coupons received by these households is 10.5 million per 
month or approximately 116 million per year. This assumes the level 
of college students drops by 33% during the three summer months. 
If the tuition deduction was not allowed, there would be an approximate 
program savings of 3 million dollars per month which is 1.4% of 
total NPA bonus dollars. 

The next two rows of Table 13 show similar statistics for 
households headed by a college student regardless of age and those 
households claiming tuition for a secondary or elementary student. 
139,000 households, or 4.2% of the NPA caseload, is headed by a 
college student. 

The last row of Table 13 indicates the incidence of strikers. 
There are approximately 5,500 striker households on the program which 
is approximately .2% of the entire NPA caseload. They receive 
$463,000 per month, which is again approximately .2% of total 
NPA bonus dollars. 



163 



-59- 

Table 14 

Table 14 depicts the difference between Puerto Rico and 
the United States for selected household characteristics. 
Puerto Rico represents 8.4% of the total NPA households and 
10.9% of total NPA bonus dollars. The essential differences 
between the two regions are: 

Puerto Rico U.S. 



Average Family Size 4.02 3.14 

Average Certifying Gross Income $228.37 $267.63 
Average Certifying Deductions 44.65 85.92 

Average Bonus 95. 9 71.75 

Average Shelter Deductions 8.66 38.45 

Percentage Spanish Surnamed 97.3% 8.2 

The difference in the average level of deductions is 

substantial. Most of this difference is accounted for by the 
lower shelter deduction in Puerto Rico 



164 




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75-969 O - 76 - 12 



172 



-68- 

TECHNICAL APPENDIX A 

Description of the Food Stamp Quality Control Program and 
Data Processing Procedures. 

The Food Stamp Quality Control System serves as a management 
tool to determine if non-public assistance 1 households are receiving 
the proper number of coupons. This determination is primarily 
based upon income deductions and size of the family. Additionally, 
quality control examines the correctness of those actions which 
deny participation to recipient or applicant households. 

Quality control was implemented in the Food Stamp program 
in July 1972 and became operational on a nationwide basis in 
January 1975. 

Each State agency has the responsibility for administration 
of its quality control system. The effectiveness of an individual 
State's quality control system depends upon sound administration 
of the component parts of quality control, i.e., universe con- 
struction and sample selection, the case review process, analysis 
of findings, and the formulation of corrective action to alleviate 
program weaknesses. 

1 A brief definition of a non-public assistance household 
is one in which at least one member is not a recipient of a 
federally aided public assistance grant. 



173 

-69- 



In order to assure compliance with Federal instructions 
and regulations, a monitoring staff of the Food and Nutrition 
Service (FNS) , U.S. Department of Agriculture, conducts, at a 
minimum, one review of the State agency's quality control 
operation each fiscal year. Those States with a semi-annual 
sample size of 800 or 1200 cases are reviewed twice during a 
fiscal year. The Federal review appraises the quality of the 
administrative and operational aspects of the system including, 
but not limited to, an assessment of sampling procedures, case 
review conduct and management, reporting techniques, and staffing 
levels . 

The sample selection process must insure that each parti- 
cipating household has an equal probability of being selected, 
this guarantees that within sampling variation all household charac- 
teristics of the entire universe will be represented in the 
sample correctly. From these simple random samples within each 
state, it is a fairly easy task to obtain national totals, means 
and percents of any desired household characteristics. 

Thirty-seven State agencies select the sample from a list 
of non-assistance households which actually purchased food stamp 
during the month. Several States select their sample from a 
list of certified eligible households. However, a case is re- 
viewed only if the household actually purchased food stamps 
for the month. The remaining State agencies employ a combination 



174 



-70- 

of certified eligible and participation listings in constructing 
the universe. States which select their list from other than a 
participation list must oversample to reach the desired sample 
sizes . 

Due to a variety of reasons, certain households which are 
selected are not subject to quality control review. Households 
in which the only member has died and households which have 
moved out of State are examples of cases not subject to review.. 

The number of active sample selections required for a State 
is based upon the estimated monthly participating caseload for 
the six-month review period. Sizes of the semi-annual sample 
range from 75 to 1200. The following table depicts the required 
semi-annual sample size for participating cases. 

TABLE A.l - SEMI-ANNUAL SAMPLES FOR PARTICIPATING CASES 



ESTIMATED MONTHLY CASELOAD SEMI-ANNUAL 

DURING REVIEW PERIOD SAMPLE SIZE 

40,000 and over 1200 
27,000 - 39,999 800 
18,000 - 26,999 550 
10,000 - 17,999 300 
7,000 - 9,999 200 
5,000 - 6,999 150 
Under 5,000 75 



175 

-71- 



Sample size for the month of April is approximately one- 
sixth of the semi-annual sample size. As with any study, not all 
households were reviewed or included in the final sample as for- 
warded to the Committee. As mentioned previously certain cases 
are not subject to review. In addition, a case may be selected 
for review but the reviewer was unable to locate the household, 
or the household may have been unwilling to cooperate, or the 
State agency may not have had enough staff to complete the entire 
caseload. These incomplete reviews, for whatever reason, have a 
potentiality for distorting results. This question is addressed 
further in Appendix B. 

The actual review process commences at this point. Each 
case selected in the sample is a igned to a quality control 
reviewer. This individual undertakes a case record review of the 
household's file at the local agency, conducts a home visit where 
the recipient is in terviewed and additionally makes secondary con- 
tacts when necessary to verify any information which may affect 
the household's eligibility or basis of issuance. 

Conclusive factual information is obtained during the review 
which verifies the household circumstances at the specific point 
in time, the review date. The review date is the first day of 
the month for which eligibility has been established for the 
household. This is the first day of the month for many cases 
and the day of certification for the remaining cases. The 



176 



-72- 

review thus confirms that the household was eligible and 
participating at the correct basis of issuance and that changes 
affecting the household circumstances were handled appropriately. 

The primary tool used by the reviewer in gathering the data 
for each household is the FNS-245, the household data sheet. This 
form provides a place for the reviewer to record the information 
and findings in relation to each step of the review, i.e., the 
case record and field reviews. The household data sheet contains 
full verification of the number of individuals residing in the 
household and the household's resources, income and deductions 
for the month. This information is needed by the reviewer to 
compute the basis of issuance and reach a decision on the house- 
hold's eligibility for the month in which the case was selected. 



For each six-month review period, the State agency reports 
to the Food and Nutrition Service on those areas of the program 
operation which are not functioning properly. The report defines 
those areas of the program operation exceeding preestablished 
tolerance limits and further provides case and dollar error rates 
by the nature and cause of error for the review period. The report 



177 

-73- 



findings are used to initiate appropriate administrative procedures 
to reduce the incidence of errors in the Food Stamp program operation. 

For purposes of the study, each State agency was requested to 
submit Form FNS-245 (the household data sheet) for each household 
selected in the April 1975 sample. The month of April 1975 was 
selected to capture the student population in addition to the 
fact that it was the most recent month of sample selections nearing 
completion at the time of the request. 

Through the use of the competitive bid process, a firm was 
employed to code the information on the FNS-24 5 and keypunch the 
coded information. The company hired for the coding 
operation had an intensive background in data entry and the key 
supervisory personnel represented many years of experience. 

The coding instructions were designed to allow extensive 
editing of the data by the computer, a minimum number of cards or 
data fields to be coded and no restrictions on the number of different 
types and amounts of income a family could have. In addition 
summary information from both the certifying and reviewing officer 
was coded. If the review was complete the detailed income and 
deduction data refers to the reviewing officer, otherwise certifying 
information is used. The instruction allows for seventy-seven 
different descriptive codes on the types of resources, income and 
deductions available to a household. 



178 



-74- 

Automated computer edit checks were performed on the keypunched data cards to ensi 
logical and consistent coding. The various edit checks ensured 
that: 

1. All cards were present for a given household. This 
included a check for the card containing general household 
information, the card(s) containing information on the household 
members, and the income detail card(s). 

2. All fields were within the appropriate ranges and 
contained no characters except digits. 

3. If the application was new, there was no information 
concerning a previous certification period. 

4. An appropriate reason was given for every case in which 
the reviewing officer did not complete the income computation. 

5. The certifying officer's total gross income minus total 
deductions equalled net food stamp income within rounding error. 

6. The certifying and reviewing officer's coupon allotment 
values were correct for the household size as coded. 

7. The certifying and reviewing officer's purchase require- 
ment values were within rounding error given that household's family 
size, total gross income and total deductions. 



179 

-75- 



8. The resource limitations were met as long as no 
information indicated the family had been declared ineligible 
due to resources. Additionally, if the household was ineligible 
due to resources, the coded values were checked to see if they 
exceeded the applicable $1500 or $3000 limitation. 

9. The sum of the detailed income and deduction amounts 
on card 3, the income detail card, agreed with the total income and 
deduction amounts coded on the card containing the general household 
information, card 1. 

10. The work allowance deduction was properly taken and the 
amounts coded for federal, State and local income taxes plus 
social security were reasonable. 

11. At least one member of the household was designated as a 
student when a tuition and/or mandatory fees deduction was present. 

12. At least one member of the household was designated as a 
striker when strike benefits were present. 

13. Only one person was designated as the head of the household. 

14. in come cases, sex of individual member (s) is unknown. 
However, sex was always to be designated for the head of the house- 
hold. 



180 

-76- 



15. The number of spouses in the household did not exceed 

one . 

16. The age of the head of the household and the spouse was 
reasonable, (i.e., no age of head was allowed under 14 years of a 

17. Federally aided public assistance and Supplemental 
Security Income (SSI) benefits coded on the income detail card 
agreed with the coding of the number of individuals receiving 
this type of income on the general information card. 

18. Old age assistance was not coded inappropriately. 

19. The coding of the current or previous certification 
periods was correct. This included a check for an overlap of 
the certification periods, a check that the ending date of the 
current or prior certification periods was later than the 
beginning date, and a check for the length of the certification 
period for non-SSI households. 

20. Information on home ownership is consistent with the 
mortgage payment information, and a rental payment did not exist 
alongside codes identified as home owning. 



21. Spouse wages were not coded if a spouse was not present. 



181 

-77- 



22. A family composed only of a head and/or spouse was not 
receiving AFDC . 

23. Resources were present when property income was present 

24. In-kind shelter did not exceed the maximum allowable, 
i.e., $25. 

25. The detail card(s) of the household members was con- 
sistent with the number of individuals coded on the general infor- 
mation card. 

Upon encountering an error, the edit program issued the 
appropriate message and continued checking for other errors. The 
next step in the edit process consisted of checking the 
error messages on each case by returning to the information on the 
FNS-245 and making the appropriate corrections. Each case 
corrected in this manner was re-submitted to the edit program unti 
the coded data fields reached the desired level of consistency 
and logic. 

The edited data was then written to tape for storage and 
retrieval purposes. A final check was conducted to ensure that 
no duplicate families were present and that no families were 
missing . 

With this level of quality control at each step of data 
processing, we are confident that any remaining errors within 
the data will not distort results. Also, as each of the tables 
in the report were prepared, all numbers were double-checked 
to guard against errors. 



182 



-78- 

Technical Appendix B 

Description of the Weighting Procedure and Discussion of the 
Problem of Non-Response 



Weighting Procedure 

As stated in the introduction/ given that each State selects 

its NPA caseload randomly, the weighting procedure is straightf orwa: 

Essentially, each observation from the i^* 1 State is multiplied by 

the ratio Ni/ni where: 

Ni — total number of NPA cases in the i th State 
or territory (from USDA records). 

ni -- total number of actual NPA cases from the i 
State in our final processed sample data fi 

The total Ni is shown in Table B. 1 as Column C, while the ni i 

shown as Column J. 



Non-Response 

The total number of cases selected in each State for the April 
sample is Column D, Table B.l. As explained in Appendix A, the size 
of this sample is based upon the size of their NPA caseload. 
The number of cases actually selected in each State is an 
unofficial USDA estimate for the month of April. 
For some States, the size of sample selected was obtained as th< 

average of the six months. 

Not all cases selected are actually completed. The reasons for 
this fall into two general categories: 1) those cases not subject 
tu review, and 2) those cases which were subject to review but not 
completed. The former category includes those households moving out 
of State, death of single-member households, households who had been 



183 



-79- 

in the quality control sample in one of the previous six months, 
l households with a fraud case pending. 

The second category of reason for not completing all the 
cases includes those households unwilling to cooperate, house- 
holds who are unlocatable, and those households not completed 
because of a lack of time or staff. 

The number of cases not subject to review and those not 
done are shown as Columns F and G. These are an average of 
the six months and is not strictly applicable to the month of 
April. Column E is obtained by subtracting Column F plus 
Column G from Column D. 

Column H indicates the number of cases from each State 
which had a complete review including income, assets, work 
registration, etc. Column J indicates the number of cases for 
which the review was completed. The difference between the 
two is that when a reviewer discovers a case ineligible ( e.g . , 
residency, no cooking facilities, or asset ineligibility) he may legitimately 
skip completing the rest of the review. Consequently, the major 
Dortion (91.2%) of this sample have had all phases of the 
review completed. Column I indicates those cases not subject 
to review but for which certifying information is available. 

Column K indicates the non-response rate for whatever 
reason. It is obtained by subtracting the total number of 
cases for which information is available (Column J) from the 



185 

-81- 




186 



-Bin 




187 



-83- 

total number of cases selected (Column D) and dividing by the 
total number of cases selected (Column D) . The last column 
indicates the number of cases forwarded from the State for 
which no income information was available. These have not 
been included in any of the tables in this analysis. 

The information in Table B.l has been summarized in Table 
B.2. For the entire caseload, 7,696 cases were selected, 
5,873 cases were completed for a non-response rate of 23.7%. 
For three States, Indiana, Michigan and Alaska, no information 
was used. If these States are completely eliminated, the non- 
response rate becomes 20.5%. 

If these incompletes are random, the analysis presented in 
this report will be unaffected. If, however, the incompletes 
are radically different from the completed caseload, the sta- 
tistics reported in this study will be misleading. One can- 
not tell from the reasons and their respective frequency as 
to whether a non-response problem exists. One could argue 
that elderly families are less likely to move, at home a 
greater percentage of the time, etc., and therefore the com- 
pleted sample might have an overabundance of elderly house- 
holds. On the other hand, reasons such as death of single- 
member units will result in an overabundance of young house- 
holds. 



75-969 O - 76 - 13 



188 

-84- 



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189 

-85- 



An Ideal Non-Response Study 

One solution to the non-response problem would be to reinterview 

a small subsample of the households for which no form was completed. 

Comparisons between these households and the actual sample would 

determine if the uncompleted forms biased the statistics in this 

study. This solution is not feasible because of cost, problems 

of confidentiality, Federal-State relations and households would 

no longer be able to recall April, 1975, income and deduction 

data. At a mininum, their recall may be biased introducing 

additional problems in analysis. 

The ideal solution to the non-response problem would be the 

gathering of several data variables from administrative records 
like family size distribution, bonus size average and distribution, 
and race. These variables would then be compared with statistics 
from the sample survey and if they were within sampling variation, 
one could feel fairly confident that the sample was not biased 
with respect to net income, family size and race. If no bias 
exists on these variables it does not prove but makes it unlikely 
that there is bias with respect to total deductions, home owner- 
ship, gross income and other variables of interest. 

Current Evidence 

Thus far, we have been unable to gather the administrative 
records to do an ideal non-response study. However, it is 
highly unlikely that the problem of non-response is biasing the 
statistics in this study to any significant degree for the following 
reasons : 

1. Study statistics are roughly comparable where 
applicable to similar characteristics in other 



190 



-86- 

studies such as Chilton, and the Current Popu- 
lation Survey. 

The statistics are not very sensitive to different 
weighting schemes. In table B.3 (similar to Table 1 
in the text) selected income, deduction and house- 
hold characteristics are shown using different 
weighting schemes. Column one of Table B.3 is 
the total NPA caseload where the three missing 
States have assumed to be equal to the average of 
all the other States' characteristics. The incom- 
pletes within each State have been assumed to be 
like the completed sample within each State. 

Column two assumes Indiana and Michigan are like 
the remaining North Central states ( i.e., Illinois, 
Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio 
and Wisconsin) . The few cases in Alaska are 
assumed to be like the average of all the other 
States and again the incompletes within each State 
are assumed to be like the completed sample 
within each State. 

Column three eliminates all the information for 
those States where the non-response rate exceeds 
50% (i.e., Arizona, Colorado, Massachusetts, 
Minnesota and Wisconsin) on the assumption that 
the completed sample in those States was different 
from the not completed sample. Essentially, 
removing these additional five States from the 
analysis had little effect upon the results. 
Compare Columns one, two and three. 



191 

-87- 



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3. Given our relatively large sample sizes, the 
incompleted sample must be radically different 
from the completed caseload to alter statistics 
significantly. For example, if the entire 

Puerto Rico sample (8.4% of the caseload) had been 
missed, the effect on the level of total deductions 
and family size would have been comparatively small. 
The average level of deductions in Puerto Rico is 
$49.05, while the U.S. average is $85.13. However, 
the inclusion of Puerto Rico only decreases the 
average level of deductions to $82.08 (see Table 14) 

4. If one assumes that the reasons underlying incom- 
pletes within the sample are like the reasons some 
cases have only certifying information rather than 
the entire review completed, some knowledge about 
potential bias may be obtained by comparing income 
review completed cases with all cases. At a min- 
imum one can conjure some reasons why the income 
review completed sample could be different from the 
sample where only a part of the review has been 
completed. However, by comparing Columns 4 versus 
the other columns in Table B.3, one finds no 
striking differences. 

Essentially with this evidence and reasoning, pending further 
study, we are confident that these statistics are reasonably close to 
the truth as it existed in the April, 1975, NPA Caseload. 



200 



201 



APPENDIX IV 

Student Participation in the Food Stamp Program 



202 



203 



THOMAS 8. FOLEY. NAM, 



VICC ( 
C DC LA OARZA. TlX. 

jokph p. vioo*rro. pa. 

WALTIR • JONCS. MX. 
to JONU. TKNN. 



OJ.fe. tyouge of fteprt*entatibe* 

Committee on agriculture 

Room 1301. Zongtoortb Sroust «mict JBuirotng; 

Klasrtjfngton, B.C. 20515 
14, 1975 



MTKTW CHRICTOJt 



JACK MIOmOWIR, TDt. 



Dear Mr. Staats: 

As you know, the House Gcrrmittee on Agriculture is undertaking a 
rather large scale study into the Food Stanp Program, and GAO is in the 
process of doing a study on the length of food stanp certification delays, 
if any, experienced around the co u n tr y. Additionally, the Oanmittee is 
focusing on the extent of participation in the Pro g r am by various contro- 
versial groups. It is with regard to the participation of one of these 
so-caned controversial groups, college stidenta, that I write this letter. 

There is little c ur re n t data with regard to who participants in the 
Program really are. I have found that attitudes about whether strikers, 
students, migrants, military personnel and the like are a formidable part 
of the caseload are based largely on individual feelings about whether these 
groups should participate. Therefore, it is my hope that the Agriculture 
Occmittee, with the help of GAD, can shed some light on actual nurrbers and 
characteristics of participants. 

Accordingly, my staff has made a tentative agreement with the GAO 
staff with regard to how we can get some data on the extent of college 
student participation. Working together, the two staffs have made a 
preliminary proposal, allowing GAO to obtain objective figures and Com- 
mittee staff to follow up with subjective data gathering, to select six 
colleges with geographic distribution, variable tuition rates, urban-rural 
distribution, public-private distinctions, etc., to determine the number 
of student head-of -household participants on a caseload basis. There would 
be three large schools (over 15,000 student body) and three small ones (under 
15,000 student body) , with a comparison of 5% of the college enrollment 
against the Food Stamp Office caseload in the case of the large schools and 
a 15% comparison in the case of the small schools. 

The GAO check of the case files would also provide information on 
household income and other types of aid (welfare payments, Veterans' 
benefits, etc.) being received, applicability of work registration require- 
ment, "bonus value" per allotment, and household size and composition, 
etc. 



75-969 O - 76 - 14 



204 



-2- 



At the end of the data collection process, GAO would analyze and 
summarize the data, showing numbers, averages and ranges. No attempt 
would be made to generalize nationally, but generalizations could be 
made among the six schools in the sample. Your staff has indicated to us 
that a total calendar time of 4 - 5 months would be needed for the project 
but in no case would the work be finalized later than April 1976. The 
Committee anticipates h earings an Food Stamp reform in the spring of 1976. 
Uierefore, in order for this segment of the study to fit into the whole 
overall study plan, we are striving for an early spring completion date. 
The Committee staff would work rather closely with the GPG field staff 
during the course of the project. 

Since this project may be interpreted by some as being somewhat 
sensitive in nature, I will make the initial explanations to the college 
officials and will provide both staffs with a copy of this explanation 
to use in the conduct of their work. 

I would like to formalize this tentative agreement between the House 
Agriculture Committee and GAO to undertake the study described above and 
request the GAO report to be presented to the Committee on a confidential 
basis. I sincerely appreciate the cooperative attitude of all GAO per- 
sonnel with whom we have worked on this and other projects and look forwart 
to a continued warm working relationship. 

With kindest regards, 

Sincerely, 



Thomas S. Foley 
Chairman 

The Honorable Elmer B. Staats 
Comptroller General of the United States 
General Accounting Office Building 
441 G Street 
Washington, D.C. 20548 



TSF:mja 



205 




COMPTROLLER GENERAL 
OF THE UNITED STATES 



WASHINGTON. D C. 20548 





A-51604 



December 2, 1975 



The Honorable Thomas S. Foley 




Chairman, Committee on Agriculture 
House of Representatives 

Dear Mr. Chairman: 

We are proceeding with arrangements for making 
a study of college student participation in the food 
stamp program along the lines described in your letter 
of November 14, 1975. We believe that the approach 
of you making the initial explanations of the study's 
purpose to officials of the six colleges selected 
should prove very helpful. Throughout our work, we 
plan to keep in close touch with your staff so that 
the information obtained may be timely and useful 
to your Committee. 



Sincerely yours, 



Comptroller General 
of the United States 




206 



207 



. . - ■ ■ XM1. ' 



?pouse of J\cprc5entiititic5 
Committee on 3grifutture 

&aem ISM. leafftsart* &nk CXltft fcaiOuij 

ffljstington, 2D.£. 20515 

December 2, 1975 



Dear .' 

In preparation for consideration of food stamp reform legislation 
to be undertaken early next year by the House Committee on Agriculture, 
the Committee is in the process of a study of the entire food stamp 
program. One of the areas of focus in the study is the participation in 
the program by various so-called "controversial" groups, and it is i~ 
regard to this issue that I write this letter. 

As the food stacrp prcgrarc is fairly r.ev a~::-.c :_r :.i:i;r.'s assistance 
programs, there is little current data with regard to oho participants 
in the program really are. I have found that attitudes about whether 
strikers, students, migrants, military personnel and others are a significant 
part of the caseload are based largely on individual feelings a'reut 
whether these groups should participate rather than on --'-ether they are 
participating. Therefore, the House Agriculture Committee is attempting 
to gather data concerning these groups so we can make more informed 
judgments about the scope of the program. 

Accordingly, with regard to the extent of student participation, 
the General Accounting Office has been requested by this Committee to 
work with Committee staff in an effort to gather data on the extent of 
college student participation. Working with GAO , we have selected six 
schools with geographic distribution, variable tuition rates, urban- 
rural distribution, public-private distinctions, etc., to determine the 
number of student head-of-household food stamp users on a caseload 
basis . 

The (name of university) .-.as beer, selected as one of the six 

schools in the survey. Very shortly GAO will be approaching officials 
on your campus to gather objective data on your institution's enrollment, 
housing patterns, financial aid trends, etc. After this information has 
been gathered, several staff members from the Agriculture Committee will 
follow up with the subjective data collection from educational officials, 
students and food stamp officials. Any GAO or Committee staff person 
who comes to your campus will have a copy of this letter to serve as a 
letter of introduction. 



208 



December 2, 1975 
Page 2 

I shall appreciate your cooperation and that of other officials on 
campus in assisting with this study in order that our Committee may be 
better informed on this important issue. Be assured that the survey is 
not being undertaken in an effort to either include or exclude students 
from the food stamp program. The selection of the (name of university) 
is not based on any complaints broueht to the attention ot the Committee 
regarding the program at the (name of university) nor does it 

constitute any special singling out ot the (name of university) exce 
as it reflects an institution which is typical of the general guidelines 
for the study. 

With kindest regards, 




Thomas S. Foley 
Chairman 



TSF:mjw 



209 



Jboutt of ftepresfentatibe* 

Committee on ieJaricullurc 

ttoom 1301, Uoiioluorllj V)ouet OUut JHuiltmia 

iiUnsfjinQtoii, JD.C. 20515 
January 23, 1976 



lT«rr DniCCTOH 



FCIAL COUNSEL 



Dear * 

This letter is with further reference to my letter of December 2, 
1975, in which I briefly described the portion of the House Agriculture 
Committee's food stamp study which deals with the degree of college 
student participation in the food stamp program. 

By now the General Accounting Office has approached your campus 
officials in an effort to gather statistical information for our study, 
and I very much appreciate the cooperation your institution has extended 
them. The enclosed questionnaire represents the Agriculture Committee 
staff data collection effort for their segment of the Committee study. 
I shall appreciate very much your completing this questionnaire and 
returning it by February 18, 1976 , to the attention of Miss Mary Jarratt 
at the following address: 

Committee on Agriculture 

Room 1301, Longworth House Office Building 
U.S. House of Representatives 
Washington, D. C. 20515 

This questionnaire is directed to data on full-time students only, 
exclusive of all night students. Should you have any questions concerning 
your questionnaire response, please contact Miss Mary Jarratt of the 
Committee staff at telephone 202 225-2171. 

It is possible that upon receipt of the questionnaire responses, 
Committee staff may require either personal or telephone follow-up 
interviews with one or more campus officials. Should a personal interview 
be desired with any of your campus officials, the Committee staff member 
will, of course, be in touch with you to request the interview. 



210 



January 23, 1976 
Page 2 



I want to reiterate my December 2 assurance that this study is not 
being undertaken with the intent of either including or excluding students 
from the food stamp program; rather, it is merely seeking participation 
data. Additionally, the selection of the ( n a»e of university) 
for our study did not represent a choice based on complaints brought to 
our attention regarding the (name of university) nor docs it 

reflect any other singling out of your institution except as it is 
reflective of an institution meeting the general statistical guidelines 
of the study. < 

On behalf of the other Members of the House Committee on Agriculture, 
I thank you for all the cooperation you have extended in connection with 
this survey. 

With kindest regards, 

Sincerely, 



Thomas S. Foley 
Chairman 



TSF:mjw 
Enclosure 



211 



THOMAS S. FOLEY. WASH, 



%)ou<ie of EeprctfcntniitieS 
Committee on Agriculture 

Hoom 1301. lonoluotlb V)ouet Office HitnlbmQ 

IWatffjington. 2D.C. 20515 



ALVIN BALOUr,, 



GLCNN TNGLISH. OK LA. 
FLOTD J. FITMIAN, IND. 
JOHN W. JCNHCTTE. JM., 



rnc&s ASSISTANT 



COMMITTEE ON AGRICULTURE 
U.S. HOUSE OF REPRESENTATIVES 
FOOD STAMP QUESTIONNAIRE 

Name of Institution 

Date 

Institution Officials Involved in Questionnaire Response: 
Name 

Title 

Name 

Title 

Name 

Title 

Name 



Title 



212 



\ 



213 



i 

What is the total dollar cost per single UNDERGRADUATE student 
for one year of attendance on your campus (sum of components 
below)? Residential $ Off-Campus $ . 



What is the breakdown for: 

RESIDENTIAL OFF-CAMPUS 

(Institutional (Commuters 
Housing) and others) 

(a) Tuition and fees -- 



(b) Room 



( c ) Board 



(d ) Books 



( e ) Miscellaneous — 



What is the total dollar cost per single GRADUATE student for 
one year of attendance on your campus (sum of components below) 
Residential $ Off-Campus $ . 



RESIDENTIAL OFF-CAMPUS 

(Institutional (Commuters 

Housing) and others) 

(a) Tuition and fees -- 



(b) Room — 



(c) Board — 



(d) Books — 



(e) Miscellaneuous — 

Do you use these full costs or a reduced budget in assessing 
student need for financial aid? 



If you use a reduced budget, what is the dollar value? $ 



What are its components? 



With regard to UNDERGRADUATES, how many students are receiving 
financial aid? 



214 



With regard to GRADUATE students, how many are receiving 
financial aid (all types of aid, such as fellowships, 
assis tan tships , including teaching, etc.)? 



To what extent is your institution able to meet its finan- 
cial aid requests for: 

UNDERGRADUATES GRADUATES 

100% 100% 

75% 75% 

50% 50% 

25% 25% 

Under 25% under 25% 

Please list: 

(a) Total number of applicants for UNDERGRADUATE financial 
aid for: 

1971 1972 1973 1974 1975 



(b) Total number of UNDERGRADUATE awards made for: 

1971 1972 1973 1974 1975 



(c) Total number of eligible UNDERGRADUATE applicants 
denied because of lack of funds for: 

1971 1972 1973 1974 1975 



(d) Total number of applicants for GRADUATE financial 

aid (including grants, fellowships, teaching assist- 
antships, etc.) for: 

•1971 1972 1973 1974 1975 



215 



7. (continued) 

(e) Total number of GRADUATE awards made for: 

1971 1972 1973 1974 1975 



(f) Total number of eligible GRADUATE applicants denied 
because of lack of funds for: 

1971 1972 1973 1974 1975 



8. Is there a difference in your ability to meet the needs of 
UNDERGRADUATE and GRADUATE students? 

Yes No 

If "yes," explain: 



9. What is the average financial aid package per student 
recipient 

at the UNDERGRADUATE level? 

at the GRADUATE level? 

10. What factors do you consider when awarding the amount of 
financial aid on a basis other than need? For example, 
do you consider such factors as: 

Yes No 

(a) State residency 

(b) Minority group status 

(c) Public assistance receipt 



216 



4 

(continued) 

Yes 

(d) Degree of parental assistance 

(e) Scholastic achievement 

(f) Field of interest 

(g) Athletic ability 

(h) Marital status 

(i) Other (please elaborate if "yes") 



For purposes of Federal student assistance programs, an app 
cant is considered independent of his parents in terms of 
financial support only if he or she can answer "no" to each 
of the following three questions during the appropriate yea 

1. Did or will the applicant live with parents for 

more than two weeks during 1974 , 1975 , 

1976 ? p 



2. 



Applicant is, was, or will be listed as an 
exemption on parents' Federal Income Tax Return 
during 1974 , 1975 , 1976 ? 



217 



11. (continued) 



3. Did or will applicant receive $600 or more 
in financial assistance from parents during 
1974 , 1975 , 1976 ? 



Note: Parent is defined as the applicant's 

mother, father, or any person who provides 
or did provide more than half of the 
applicant's support. 

Are these the criteria you use in determining the 
"independent status" of a student for financial aid 
purposes? 

Yes • No 



If your answer is "no," what are the ceiteria? 



12. How many of your financially aided students have been 
classified as . " independent " ? 

UNDERGRADUATE 

1971 1972 1973 1974 1975 



GRADUATE 

1971 1972 1973 1974 1975 



13. Do you have a limit on the amount of aid a student can receive 
under the financial aid package at the UNDERGRADUATE level? 



Yes 



No 



218 

6 



13. (continued) 

If "yes," explain. 



Do you have a limit on the amount of aid a student can 
receive under the financial aid package at the GRADUATE 
level? 

Yes No 



If "yes," explain. 



14. If you find a parent able to contribute to a student's 
needs but unwilling to do so, do you make any adjust- 
ments in the computation of the financial aid package? 

Yes No 



15. Would it be fair to say that your financial aid package 
is determined on a national "need analysis" system? 

Yes No 



If "no," briefly explain your system. 



16. What was your total 1970-71 enrollment: 

UNDERGRADUATE GRADUATE 

What was your total 1971-72 enrollment: 
UNDERGRADUATE GRADUATE 



219 



16. (continued) 

What was your total 1972-73 enrollment: 

UNDERGRADUATE GRADUATE 

What was your total 1973-74 enrollment: 

UNDERGRADUATE GRADUATE 

What was your total 1974-75 enrollment: 

UNDERGRADUATE GRADUATE 

What is your total 1975-76 enrollment: 

UNDERGRADUATE GRADUATE 



17. Is there any difference in your ability to meet the 
UNDERGRADUATE financial aid requests of your student 
body today than in 1970? 

Yes No 



If "yes," explain. 



Is there any difference in your ability to meet the 
GRADUATE financial aid requests of your student body 
today than in 1970? 

Yes No 



If "yes," explain. 



18. Give the number of your UNDERGRADUATE student body living 

(a) in institutional housing 

with cooking facilities 

without cooking facilities 

(b) # in sororities or fraternities 

(c) with parents or relatives 

(d) other off-campus housing 



75-969 O - 76 - 15 



220 

8 

18. (continued) 

Give the number of your GRADUATE student body living 

(a) in institutional housing 

with cooking facilities 

without cooking facilities 

(b) in sororities or fraternities 

(c) with parents or relatives 

(d) other off-campus housing 

19. What is the average per capita apartment rent in your area? 

20. How many of your UNDERGRADUATE students are married and 
the head of a household? 

How many of your GRADUATE students are married and the 
head of a household? 

21. If you have records on the number of dependents per 
married UNDERGRADUATE family, how many have: 

(a) one dependent 

(b) two dependents 

(c) three dependents 

(d) more than three dependents 

If you have records on the number of dependents per 
married GRADUATE family, how many have: 

(a) one dependent 

(b) two dependents 

(c) three dependents 

(d) more than three dependents 



221 



9 

With regard to your UNDERGRADUATE student body, 
(a) How many have family income levels of: 

(1) zero - $5,000 

(2) $5,000 - $10,000 

(3) $10,000 - $17,500 

(4) $17,500 - $25,000 

(5) $25,000 and above 

(b) SAT scores: 

What is the minimum admittance score you 

accept ? 

What is the average admittance score ? 

(c) Sex: 

Number of male students 

Number of female students 

(d) What are the two predominant minority populations: 

(state number if known) 

(state number i* 7 known) 

(e) With regard to the geographic background of your 
student body, do you draw from 

1 national population 

2 regional population 

3 state population 

4 local (less than statewide) 

population 

5 a combination of the above 

(which ones) 



222 



10 

(continued ) 

With regard to your GRADUATE student body, 

(a) How many have family income levels of: 

(1) zero - $5,000 

(2) $5,000 - $10,000 

(3) ,$10,000 - $17,500 

(4) $17,500 - $25,000 

(5) $25,000 and above 

(b) GRE, LSAT and MCAT scores: 

What is the minimum admittance score you accept for: 

GRE LSAT MCAT 

What is the average admittance score for: 

GRE LSAT MCAT 

(c) Sex: 

Number of male students 

Number of female students 

(d) What are the two predominant minority populations: 

(state number if known) (state number if known) 

(e) With regard to the geographic background of your studen 
body, do you draw primarily from: 

1. national population 

2. regional population 

3. state population 

4. local (less than statewide 

population) 

5. a combination of the above 

(which ones) 



223 



n 

23. Has there been an increase since 1971 in older (age 25 
and above) students applying to your institution: 

(a) at the UNDERGRADUATE level ? Yes No 

(b) at the GRADUATE level ? Yes No 

Has there been an increase since 1971 in the receipt of 
food stamps in this older student category: 



(a) at the UNDERGRADUATE level ? Yes No 

(b) at the GRADUATE level ? Yes No 

24. Do you feel that the availability of food stamps has 
made any difference in the living arrangements or 
housing patterns of UNDERGRADUATE students over the 
past five years? 



Yes 
If "yes 



No 



explain . 



Do you feel that the availability of food stamps has 
made any difference in the living arrangements or 
housing patterns of GRADUATE students over the past 
five years? 

Yes No 



If "yes," explain. 



25. Do you take participation in the food stamp program 
into account in compiling a student's financial aid 
package? 



Yes 



No 



224 

12 

Is your campus a recipient of food commodities? 
Yes No 

If "yes", what is the dollar value per school year for: 
1970 1971 1972 1973 1974 1975 



Does your institution encourage participation in college work 
study programs? Yes No . 



Does the school provide job placement services to UNDER- 
GRADUATES during their educational career? Yes No 



How many years after graduation is the placement service 
active for: 

UNDERGRADUATE degree holders 



GRADUATE degree holders 



Please list the number of applicants for placement services 

and the number of positions filled for degree holders for: 

Number of Number of Number of Number of 

UNDER - positions GRADUATE positions 

GRADUATE filled applicants filled 

applicants 

1971 



1972 



1973 



1974 



1975 



Does your institution provide a compulsory, comprehensive 
health insurance plan to students? 



Yes 



No 



225 

13 

29. (continued) 

If so, what is the yearly cost per student? 
What items are covered in the plan? 



30. Do you provide discounted textbooks: 

(a) to all students 

(b) to some students 



Do you discount books other than textbooks? 
Yes No 



31. Please list any other discounts or benefits available 
to students. 

UNDERGRADUATE GRADUATE 

1 1 

2 2 

3 3 

4 4 

5 5 

6 6 

32. Does the institution have records of food stamp participa- 
tion by students? 

Yes No 



226 

14 



33. Is your institution called upon to supply to food stamp 

offices income verification information for student applicants? 

(a) Often 



(b) Seldom_ 

(c) Never 



Does your institution check with food stamp offices on 

food stamp participation of students applying for financial aid? 

Yes No 



34. Does your institution have an official policy with regard 
to encouraging or discouraging food stamp participation? 

Yes . No 



If it does not have such a policy, do you feel it should have one? 

Yes No 

What is the reason for the institution's position? 



35. What role have student organizations played in encouraging 
or discouraging participation in the food stamp program? 



If there has been a student outreach effort, has it come 
primarily from: 

(a) student government 

(b) other student groups 

(c) newspaper 

(d) other (please identify) __ 



227 



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»VID K BOW EN. MISS. 
a ROSE. MX. 

UTTON. MO. 
MCXMHIDOE. ICY. 
MCK W. RICHMOND. » 
ID MOHN. MINN. 

uawuvn. ores. 

IN BALXUS. WI*. 

[ KKWIWia. TEX. 
O-TY BEDEUL, IOWA 
TNEW F. MC HUSH, N.T. 



^ouae of Jtepreaentattues 
Committee on agriculture 

»»in 1301, langtoortt) frrast «K(itt infilling 

Washington, B.C. 20515 
February 12, 1976 



Dear Mr. 

The House Committee on Agriculture Is Involved in an In-depth study 
of the Federal food stamp program, and one segment of that study Involves 
an effort to determine the extent of college student participation in the 
food stamp program. 

In this regard, the General Accounting Office and our Committee staff 
have designed a study involving six schools with geographic distribution, 
variable tuition rates, urban-rural distribution, public-private distinctions, 
etc. , to determine the number of student head-of-household food stamp users 
on a caseload basis. The General Accounting Office has already drawn a 
random sample of student names and addresses from the six college enrollments 
and has begun approaching food stamp offices in the areas of those six colleges 
to determine whether the sample students are listed on the food stamp case 
files. Your office is located in one of the six areas, and I am sure GAD has 
by now approached your office for a comparison of student names to food stamp 
case files. 

The enclosed questionnaire represents the Committee staff portion of 
the data collection effort and is primarily subjective in nature. I shall 
very much appreciate your filling out the questionnaire and returning it by 
March 3, 1976, to the attention of Miss Mary Jarratt at the following address: 

Committee on Agriculture 
U.S. House of Representatives 
1301 Longworth House Office Building 
Washington, D. C. 20515 

Should you have any questions concerning the questionnaire, please contact 
Miss Mary Jarratt of the Committee staff at telephone number 202 225-2171. 

Be assured that the selection of the six educational institutions and 
the food stamp offices in the study involve no complaints brought to the 
attention of the Committee regarding the food stamp program in these six 
areas nor does it involve any special singling out of the schools and 



244 



February 12, 1976 
Page 2 



food stamp offices except as they reflect institutions typical of the get 
guidelines of the study. Additionally, the study is not designed to eith 
include or exclude students from the program; rather, it is designed to 
determine the number of student participants and some information regardl 
their general characteristics. 

Upon receipt of the questionnaire responses, it may be necessary for 
Committee staff to follow up with either telephone or personal interviews 
In the case of a personal interview, the staff member would, of course, 
contact you for an appointment. 

On behalf of all the Members of the House Committee on Agriculture, 
I want to thank you for your cooperation with GAO and with our staff. 

With kindest regards, 

Sincerely, 



Thomas S. Foley 
Chairman 



TSF:mjw 
Enclosure 



245 



COMMITTEE ON AGRICULTURE 
U.S. HOUSE OF REPRESENTATIVES 
FOOD STAMP (QUESTIONNAIRE 



>cation of Food Stamp Office: 



(Street) 



(State) (Zip) 



(Telephone) 



ame and Position of Official 
sponding to this Questionnaire: 



(Name) 



(Title) 



ate: 



247 



What was your average food stamp caseload (public 
assistance and nonpublic assistance) for: 

Public Assistance Nonpublic Assistance 

Cases Cases Total 

1970 

1971 

1972 

1973 . 

1974 

1975 



What was the total number (public assistance and nonpublic 
assistance) of persons who received food stamps during: 

Public Assistance Nonpublic Assistance 

Cases Cases Total 



1970 
1971 
1972 
1973 



1974 
1975 



Please provide your best estimate of the number of student 
participants for the following years. 

Public Assistance Nonpublic Assistance 

Cases Cases Total 



1970 



1971 
1972 



1973 



1974 



1975 



248 



- 2 - 

3. With regard to your response to Question 2 above, what 
factors do you feel most contribute to the increase 

or decrease in student participation? 

1. 
2. 
3. 
4. 

4. Do you feel that you have encountered any special 
certification problems with your student cases? 

Yes No 

If your answer is "yes," what aire they? 

1. 

2. 

if jam 

5. Do you feel there are any groups of students more likely 
to participate than others? 

Yes • No 



If you -answer is "yes," please elaborate. 



249 



- 3 - 



6. Have you noticed a difference in the extent of participa- 
tion in the food stamp program between graduate and 
undergraduate students? 

More graduate student participation 



More undergraduate student participation 



No noticeable difference 



7. Do you feel there are problems of students living together 
and signing up separately when they are not maintaining 
separate eating and food preparation facilities? 

Yes No 



In cases where you suspect there is such a problem, what 
do you do to verify the actual living situation? 



If home visit, how frequently? 



8. Do you feel that your office is adequately staffed to 

the extent you can perform living arrangement verifica- 
tions, income verifications and the like to the degree 
you feel necessary? 

Yes No 



If your answer is "no," what reasons account for the 
under staf f ing? 

1. 



2. 



3. 



4. 



250 



- 4 - 

Do you feel students should be allowed to participate 

in the food stamp program under the eligibility requirements 

which currently exist? 

Yes No 

If your answer is "no," how do you think the eligibility 
requirements should be changed? 

1. 
2. 
3. 
4. 
5. 
6. 
7. 



8. 



251 



5 - 



10. Has there been any student outreach effort in your area 
of which you are aware? 

Yes No 



If your answer is "yes," by whom? 



What form did the outreach effort take? 



Did the student- oriented outreach effort bring in more 
applicants? 

Yes No 



If "yes," were the applicants: 
(a) generally eligible 



(b) generally ineligible 



(c) about equal with 

eligibles and ineligibles 



75-969 O - 76 - 17 



252 

- 6 - 



lias there been a general outreach (not just focused on 
students) effort in your area? 

Yes No 



If your answer is "yes," by whom? 



What form did the outreach effort take? 



Did the general outreach effort bring in more applicants? 

Yes No 

If "yes," were the applicants: 

(a) generally eligible 

(b) generally ineligible 

(c) about equal with 

eligibles and ineligibles 

have you experienced a problem of students living in 
dormitories without cooking facilities applying for the 
program? 



Yes 



NO 



253 



- 7 - 



13. To the best of your knowledge, are you aware of an 

official role of the educational institutions in your 
area either encouraging or discouraging participation 
by students in the food stamp program? 

Yes No 



If your answer is "yes," what kind of role does the educational 
institution play? 



Why do you feel the institution has taken this official 
position? 



14. Do you seek student income verification information 
from the educational institutions in your area? 

Yes No 

If "yes," are you successful: 

(a) all of the time? 

(b) half of the time? 

(c) seldom? 



(d) never? 



254 



15. Do you check the tax dependency status of the student 
applications? 

Yes No 



If "yes," how? 



16. Which educational institutions in your area are the 
main sources of your student applicants? 



1. 

2. 



3. 



255 




Jbouit of fceprettntatibrt 
Ctmmmzt on 3LgrUuU»re 

MUifr tn gftm, B.C. 20615 

MEMORANDUM 



Members, Committee on Agriculture 
Thomas S. Foley, Chairman 
May 6, 1976 

Subject: Food Stamp Study - Student Participation in the 
Food Stamp Program at Six Selected Universities 



In order to obtain information on the extent of 
student participation in the Food Stamp Program and on the 
characteristics of such participants, the Committee on 
Agriculture requested the General Accounting Office to work 
with the Committee staff in an effort to gather data on a 
caseload basis on full-time student, head-of -household 
food stamp participants . GAO and Committee staff jointly 
selected six universities with geographic distribution, 
public-private distinctions, variable tuition rates, urban- 
rural distribution, etc., as a basis for this survey. 



Following the selection of the six schools, a match 
was made by GAO of a certain percentage of the names of 
the college enrollment against the caseloads of three food 
stamp offices per school in order to get a statistically 
reliable projection of the number of Program participants 
per school. It should be pointed out that the results of 
this survey are not generalizable nationwide, but they are 
generalizable among the six schools in the survey. 

The results of this six-school GAO survey 
(Attachment C) appear all the more valid, however, when 
compared against the results of the House Committee on 
Agriculture's Quality Control sample (nonpublic assistance 
caseload only) for the month of April 1975, a survey which is 
generalizable to the food stamp population nationwide. The 
QC survey indicated 185,000 (or 5.6%) families out of a 



256 

- 2 - 



total NPA caseload of 3,312,000 were households containing 
a college student, reflecting an annual bonus coupon 
receipt of $116 million. Of this caseload, 4.2% wer e 
households headed by a college studen t. The GAO report 
projected the number of student-headed food stamp households 
in the study to be in the range of 3.24% -4.28% , directly 
reflecting the QC findings. 

The attached GAO report contains much information 
on characteristics of student heads of households in the 
sample, but I call your special attention to the summation 
of findings contained on Pages 1-7. Of particular interest 
is the finding that the rate of participation is higher at 
the three State-supported, lower attendance-cost schools . 
Of predictable note is the fact that graduate student 
participation is greater than undergraduate participation. 
Somewhat unpredictably, given popular opinion with regard 
to student household composition, approximately two-thirds 
of the food stamp recipients in the sample claimed to be 
single-member households. (It should be pointed out here 
that GAO did not verify the living situations; they merely 
gathered data from the food stamp case files. To the 
extent the student correctly indicated his actual living 
situation, that situation is reflected in these findings.) 
Somewhat surprisingly, too, as indicated on Page 6 of the 
summary, 8% of the student food stamp households reported 
"zero" income; and reported sources of income, after wages, 
include loans, scholarships, Veterans benefits, Social 
Security, welfare, parental support, unemployment compensa- 
tion, child support and "other," in descending order. This 
data would indicate a rather high reliance by students at the 
selected schools on Government-subsidized aid as income. 

Committee staff developed a questionnaire, directed 
to the six colleges in the study, dealing with such factors 
as enrollment trends, cost of attendance, method of 
calculation of financial aid package, ability to meet 
financial aid requests, position on student participation 
in the Program, etc. Much of the material collected in 
the questionnaire was also obtained by GAO in their portion 
of the survey. Therefore, the staff analysis of the college- 
focused questionnaire (Attachment A) addresses only those 
issues not effectively dealt with in the GAO survey. (The 
University of Portland did not respond) . 



257 



- 3 - 



Committee staff also developed a questionnaire to 
be sent to three food stamp offices per school (two offices 
in the case of North Texas State University and four in the 
case of the University of Tampa) as identified by GAO as 
being offices servicing colleges under study. This 
questionnaire dealt with such matters as special certification 
problems associated with student participation, patterns 
of student participation, student eligibility criteria, 
etc. All offices responded with the exception of one. An 
analysis of the results of this questionnaire is included 
as Attachment B. 

As with the previous six components of the Food 
Stamp Study which have been distributed to Committee Members, 
this is not an official Committee document. However, 
distribution is not restricted. 



TSFrmjc 



I 



259 



Attachment A 

ANALYSIS, COLLEGE-FOCUSED QUESTIONNAIRE, STUDENT STUDY 

The Committee staff developed a questionnaire to be sent directly 
to the six selected schools. Much of the information collected confirms 
the material gathered by the GAO survey and, therefore, is not separately 
dealt with in this analysis. Five of the six schools returned the question- 
naire. The University of Portland did not respond and is not included in 
this analysis. 

One area explored in the Committee questionnaire, in greater 
detail than the GAO survey, was that of the financial aid needs of students, 
and the ability of the institutions to meet those needs. The undergraduate needs 
were met 100% - 75% - 75% - 51-52% - 25-35%, with both the highest and lowest 
percentage of unmet need in the private schools. The graduate student needs 
were met 100% - 50% - 43-45% - under 25%, again with both the highest and 
lowest percentage of unmet need in the private schools. 

It is interesting to note that the ability of the school to meet 
the financial aid requirements of the students has no direct correlation to 
the food stamp participation rates. For example, the University of Tampa 
showed the least ability to meet financial aid needs (25-35% for undergraduates 
and under 25% for graduate students), but had the second lowest food stamp 
participation rate (.58%). On the other hand, San Francisco State University, 
with the lowest cost for education to the student and with the ability to 
meet the financial aid requests of the students being approximately 50% 
overall, showed the highest participation rate (more than 13%). (GAO 
chart p. 15) 

The questionnaire surveyed the number of applicants, per institution, 



260 



Page 2 

for financial aid from 1971 to 1975. Of the schools where records were 
available, a steady increase was found in the number of both graduate and 
undergraduate applicants for financial aid; while the ability to meet the 
needs remained relatively stable. Most schools attributed this stability to 
the establishment of the BEOG (Basic Educational Opportunity Grant) Program. 
BEOG is a Federal program, under the Office of Education, initiated in 1973 
to provide a basic educational subsidy to qualifying students. Eligibility 
is determined by a "needs analysis"; and a grant, with no payback requirement, 
is made directly to the student. The Program is available only to under- 
graduates, with most graduate students relying on various loan programs and 
fellowships. 

All of the schools responding indicated no official policy on the 
issue of food stamp participation by students, and only San Francisco State 
University and the University of Tampa indicated that they were ever called 
upon by a food stamp office to verify student income and deduction information. 

It is interesting to note that 8% of the students surveyed claimed 
"zero" gross income when applying for food stamps. The majority of the 
students, approximately 70%, reported income from unemployment compensation, 
welfare, Social Security, Veterans benefits, scholarships and loans for an 
average gross monthly income of $202. Veterans benefits accounted for the 
highest average monthly income of $275; while the average loan income was 
$187. About 9% of the students derived funds from parental support and child 
support. Some 38% indicated income from wages or salary; and 5% received 
support from "other" sources. (Figures do not add to the total number of 



261 



Page 3 

recipients in the survey, as some students had multiple sources of income.) 
From the gross income figure is subtracted the deductions for living expenses, 
tuition and fees, etc., in order to arrive at net income for food stamp 
purposes. (GAO summary, page 6; and Exhibit D, GAO survey, page 18) 

All of the schools responding indicated that they do not take a 
student's participation in the food stamp program into account when compiling 
a student's financial aid package. 

San Francisco State University and the University of Tampa 
indicated an increase in older students (25 and over) since 1971 in both 
graduate and undergraduate programs. North Texas State University reported 
an increase in older graduate students. 

All of the schools responding indicated that they use the BEOG 
(Basic Educational Opportunity Grant) criteria in determining the "independent" 
status of a student for financial aid purposes. An applicant is considered 
independent of his parents in terms of financial support only if he or she 
can answer no to each of the following three questions during the appropriate 
years : 

1. Did or will the applicant live with parents for more than 
two weeks during last year, this year or next year? 

2. Applicant is, was, or will be listed as an exemption on 
parents' Federal Income Tax Return during last year, this 
year, or next year? 

3. Did or will applicant receive $600 or »ore in financial 
assistance from parents during last year, this year, or 
next year? 

Note: Parent is defined as the applicant's mother, father, or 
any person who provides or did provide more than half of 
the applicant's support. 



262 

Page 4 

The University of Tampa showed a decrease in independent under- 
graduates, and the University of Wisconsin indicated a decrease in independent 
graduate students, during the past five years. At San Francisco State 
University, the University of Pennsylvania and the University of Wisconsin, 
the number of independent undergraduates rose dramatically from the 1971 
figures. 

The following comments were received in response to the question- 
naire inquiry on the University's position on food stamp participation by 
its students: 

University of Wisconsin : "Possibly might be useful for a small number 
of students. However, from past experience we believe we would 
encounter a substantial amount of extra work with little useful return 
for the energy expended. We feel it would have a very poor cost 
effectiveness ratio." 

University of Pennsylvania : "We do not believe our institution should 
be involved in any way in food stamp participation." 

University of Tampa : "For the most part, the majority of our student 
body does not meet the qualifications to be eligible for food stamps." 
San Francisco State University : "The policy should be developed by 
the Department of Agriculture which is accountable for the Food Stamp 
Program. " 

North Texas State University : had no comment. 

The results of the questionnaire clearly indicate the increased 
demand for financial aid in an already highly government-subsidized field. 
Of significance is the high rate of participation in the Food Stamp Program 



263 



Page 5 

by students attending State-supported, low-cost schools. However, the 
Universities expressed a general reluctance to formulate an official pol 
with respect to the participation of students in the Food Stamp Program. 



265 

Attachment B 

ANALYSIS, FOOD STAMP OFFICE QUESTIONNAIRE, STUDENT STUDY 

The Comramittee staff developed a questionnaire to be sent to the 
food stamp offices identified by GAO as the offices in the college area 
probably having the greatest concentration of students attending the school 
surveyed. (As it turned out from the questionnaire results, fewer than half 
of the offices indicated the institution under survey as a main source of 
student applicants.) 

More than half of the responding offices indicated a noticeable 
increase in student participation, due largely to increased outreach efforts 
in general and increased referrals from financial aid offices. The results 
also indicated that liberalized Program guidelines, allowing more people to 
qualify, and the increase in student rolls because of the bleak job market, 
are participation factors. 

Twice as many offices indicated special certification problems 
identified with student cases as not. Of the special problems identified, 
verification of income, scholarships, grants, loans, etc., and the averaging 
of such income over the academic year, are the most formidable ones. One 
respondent stated, "Students tend to manage financially through receipt of 
grants and personal loans. Policy needs to be adopted to consider all loans, 
whether deferred or not, as income." Documentation of income information, 
particularly on out-of-State students, was cited as a problem on several 
questionnaires. Offices also indicated difficulties with verification of 
living arrangements, determination of tax dependency status, and obtainment 
of parental cooperation. Administrative problems are created by peak month 



266 

Page 2 

student applicants, breaks in the school year and class schedules causing 
appointment-scheduling problems. 

Ten of the food stamp offices in the sample stated that no one 
group of students was more likely to participate than another, while seven 
responded that identifiable groups of students could be cited as more likely 
to participate in the Program. "Older, poor students who are working their 
way without help of parents" were cited as most likely participants, along 
with "students on grants and loans, Veterans and Social Security recipients." 
One office said that "those who want to get something for nothing" are the 
most likely student participants, and several offices identified out-of- 
State students as most likely participants. 

Even though the GAO survey found that graduate student participation 
was higher than undergraduate, ten offices indicated they had noticed more 
undergraduate participation than graduate. One noticed more graduate 
participation, and six saw no noticeable difference. 

Twelve offices indicated a problem with students living together 
and signing up separately when not maintaining separate eating and food 
preparation facilities, and five offices indicated no problem in this area. 
Home visitation for verification of living arrangements is the method most 
often cited to deal with this problem, but one office said that it requires 
a "student's written statement, under penalty of perjury, explaining living 
situation or that food is not shared." 

Six offices indicate they are adequately staffed to the extent 
they can perform living arrangement verifications, income verifications and 



267 



Page 3 

the like to the degree necessary to deal with applicants, and 11 Indicate 
understaf f ing. Lack of funding for necessary personnel and complexity of 
food stamp regulations, requiring undue time consumption for application 
processing are often cited as reasons for understaf f ing . One respondent 
cited the "change in Program intent from original policy of upgrading 
nutritional value of low-income households to one of subsidizing families 
caught in the inflationary bind. This change in Program philosophy has 
caused tremendous increase in the caseloads with no appreciable increase in 
staffing." Several offices indicated that there is a "lack of any manifested 
interest on the part of USDA to help police the problem." 

In response to the question as to whether students should be 
allowed to participate in the Food Stamp Program under current eligibility 
requirements, 11 responded "yes" and six responded "no". Of those indicating 
a need for change in student eligibility requirements, practically all were 
in the direction of more stringent requirements. One respondent indicated, 
"Student needs should be met by financial aid office at universities. As it 
exists, certain food needs are part of financial aid and Food Stamps are a 
duplication of service." One office respondent said, "The recent re-enactment 
of tax dependency criteria is a step in the right direction but is a very 
complicated and time-consuming process." Several offices wanted a more accurate 
method of determination of student income, suggesting this particularly in the 
case of out-of-State students. One office wanted no "zero" purchase allowed 
for students, and still another wanted graduate students excluded entirely. 
Several States apparently have an influx of out-of-State student participants, 



75-969 O - 76 - 18 



268 

Page 4 

and one suggested a "residency requirement to prevent out-of-State students 
from voluntarily choosing college in a desirous location and being auto- 
matically eligible to apply for welfare benefits." 

Eight offices said there had been student outreach efforts in 
their areas, and nine said they were not aware of any special student outreach 
efforts. In cases where student outreach had been observed, it had been carried 
out by staff of the social services division, Veterans Affairs representative, 
campus student groups or food advocacy groups. The outreach effort was most 
generally observed in the form of campus newspaper articles, posters, or 
speaking engagements on campus. Five respondents indicated that the student- 
motivated outreach had brought in more applicants, and two indicated that it 
had not resulted in more applicants. Ten either did not respond or noticed 
no difference. 

All seventeen responding offices indicated a general outreach 
effort. In addition to the above-mentioned groups involved in student out- 
reach efforts specifically, community action groups, elderly-benefit-oriented 
groups, religious groups and minority groups were also cited as leaders in 
general outreach. The general outreach was evidenced in the form of speaking 
at public and private organizations, TV and radio public service spot announce- 
ments, direct mailings, personal contacts with supermarket shoppers, etc., 
public school instruction, "hot line" phone services and instruction by 
Extension Service personnel. Twelve offices observed an increase in applicants 
as a result of this effort, and three did not. Two saw no noticeable difference 
in applicants. Five said the new applicants were generally eligible, and 
seven indicated that the new applicants were about equal with eligibles and 



269 

Page 5 
ineligibles. 

In response to the question as to whether a problem had been 
experienced with students living in dormitories without cooking facilities 
and yet applying for food stamps, three responded "yes"; 12, "no"; one, 
"nothing serious"; and one, "no response." 

Concerning the query as to the awarenesss of the office about 
any official role being taken by the educational institutions in the area in 
either encouraging or discouraging food stamp participation by students, six 
indicated an awareness of an official role, and eleven indicated an unawareness 
in this area. One did not respond. Where noted, the food stamp office said 
the official role was either "to inform eligible students of the availability 
of the Program" or "to take into account food stamp receipt to reallocate 
resources to other students." One felt the institution had been encouraged 
by the welfare department to enlighten students of the Program, and one noted 
that the Veterans representative actually performed a prescreening function. 

Fourteen offices indicated that they seek student income 
verification information from the educational institutions in their areas, 
and three indicated they do not seek such information. Of the fourteen offices 
where information is sought, ten indicated they were successful "all of the 
time," two indicated success "half of the time," and two did not answer as to 
the success of their inquiries. 

Thirteen offices indicated that they do check the tax dependency 
status of the student applicants, usually by written inquiry of the parent or 
guardian. Four indicated no attempt to check the tax dependency status. 



270 



Page 6 

(Of these four, three were in California, where the tax dependency provision 
had not been implemented at the time the survey was taken.) 



271 



REPORT TO THE HOUSE 
COMMITTEE ON AGRICULTURE 
BY THE COMPTROLLER GENERAL 
'>XXi' OF THE UNITED STATES 



Student Participation In The 
Food Stamp Program At 
Six Selected Universities 

Food and Nutrition Service 
Department of Agriculture 



GAO obtained data on the number of college 
students receiving food stamps as heads of 
households at six selected universities-Tampa, 
Wisconsin. North Texas State, Pennsylvania, 
Sdn Francisco State, and Portland. The per- 
cent of full-time students from the selected 
schools receiving food stamps as heads of 
households in the project areas reviewed 
ranged from less than one-half of 1 percent 
for North Texas State to over 13 percent for 
San Francisco State. 



RED-76-105 



APRIL 2 9, 1976 

Attachment C 



273 



COMPTROI 1 FR GENERAL OF THE UNITED STATES 
WASHINGTON. D.C. Z0348 



A-51604 

The Honorable Thomas S. Foley 
Chairman, Committee on Agriculture 
House of Representatives 

Dear Mr. Chairman: 

In accordance with your request of November 14, 1975, 
and subsequent discussions with your office, we obtained 
data on the number of full-time students receiving food 
stamps as heads of households at six selected schools: the 
University of Tampa, the University of Wisconsin, North 
Texas State University, the University of Pennsylvania, 
San Francisco State University, and the University of 
Portland. For those students identified as recipients 
of food stamps, we obtained data on incomes, food stamp 
bonus values, and household sizes and compositions. We 
also obtained information on financial aid, housing avail- 
ability, and attendance costs at each school. 

This report summarizes the results of our review. Ap- 
pendixes I through VI contain information on location, en- 
rollment, student housing, education-related financial aid, 
and the cost of attendance for each of the six schools dur- 
ing the 1975-76 academic year. Exhibits A through F contain 
food stamp participation and recipient data for the six 
schools. Data for graduate and undergraduate students is 
shown separately. The participation and recipient data 
should be representative of the circumstances at the six 
schools reviewed but may not be representative of the cir- 
cumstances at other schools or for all schools, nationwide. 

PROGRAM DESCRIPTION AND SCOPE OF REVIEW 

The food stamp program, authorized by the Food Stamp 
Act of 1964 as amended (7 U.S.C. 2011), is designed to 
help low-income households obtain nutritionally adequate 
diets by supplementing their food budgets. Under the 
program, participating households buy food stamps having 
a face value greater than their purchase price. The stamps 
are used to buy food at participating stores. The prices 
participants pay for the stamps and the total value of the 
stamps they receive are based on household size, income, 
and certain deductible expenses; extremely low-income house- 
holds get food stamps free. The difference between the 
face value of food stamps and their purchase price is termed 
"bonus value." 




274 



A-51604 

Current food stamp program instructions include in 
their definitions of "household" (1) an individual living 
alone who purchases and prepares food for home consumption 
and (2) a group of individuals who are living as one economic 
unit and sharing cooking facilities. "Head of household" 
is the person in whose name application is made for partici- 
pation in the program by a particular household. Eligibility 
criteria and procedures for obtaining food stamps are gener- 
ally the same for college students as for other applicants. 
To qualify for food stamps, however, college students must 
not be claimed as dependents on their parents' or guardians' 
Federal income tax returns, except that they may be claimed 
if the parents or guardians are eligible for food stamps. 
Students enrolled at least halftime in a school or train- 
ing program which is recognized by any Federal, State, or 
local government agency are exempted by the Food Stamp Act 
from the program's work registration requirements. 

As agreed with your office, we made our review at six 
universities and at food stamp project offices in geographi- 
cal areas surrounding these schools, as shown below. The 
schools were selected jointly with your office, to obtain 
wide geographical coverage and to cover public and private 
institutions, urban and rural locations, large and small 
universities (total enrollment over or under 15,000 stu- 
dents, respectively), and differing attendance costs (tui- 
tion, fees, and room and board). 

University 

Tampa — a small, private school 
in an urban setting with an 
estimated average undergrad- 
uate attendance cost of $3,700 
a year. 

Wisconsin — a large, State- 
supported school in a predom- 
inantly rural setting with an 
estimated average undergrad- 
uate attendance cost for an 
in-State resident of $1,905 
a year. 

North Texas State — a large, 
State-supported school in a 
rural setting with an esti- 
mated average undergraduate 
attendance cost of $1,745 a 
year . 



Food stamp project areas 

Hillsborough, Manatee, 
Pinellas, and Pasco Counties, 
Florida. 



Dane, Columbia, and Rock 
Counties, Wisconsin. 



Denton and Dallas Counties, 
Texas . 



2 



275 



A-51604 



Pennsylvania — a large, pri- 
vate school in an urban 
setting with an estimated 
average undergraduate attend- 
ance cost of $5,733 a year. 



Philadelphia, Delaware, and 
Montgomery Counties, Pennsyl 
vania. 



San Francisco State — a large, 
State-supported school in an 
urban setting with an esti- 
mated average undergraduate 
attendance cost for an in- 
State resident of $1,351 a 
year .. 

Portland — a small, private 
school in an urban setting 
with an estimated average 
undergraduate attendance 
cost of $3,550 a year. 



San Francisco, Alameda, and 
San Mateo Counties, Califor' 
nia. 



Multnomah and Clackamas Coun 
ties, Oregon, and Clark 
County, Washington. 



At each school, we obtained the number of full-time 
undergraduate and graduate students registered for the fall 
1975 or spring 1976 school term. (Full-time students study- 
ing for professional degrees in such fields as law or 
medicine were included in our graduate student tabulations.) 
At each school we drew random samples of students which 
ranged from 4.6 to 31 percent of the full-time student en- 
rollment. We then visited food stamp project offices serv- 
ing the areas where large numbers of students from these 
schools resided, to determine whether the students in our 
samples were authorized to receive food stamps as heads of 
households. We defined as recipients those student heads 
of households who were authorized to receive food stamps 
at some time during the period December 1975 through Feb- 
ruary 1976. Through this procedure 224 students were 
identified as food stamp recipients from our total sample 
of 6,181 students. We used these sample results to esti- 
mate the number of full-time students at the six schools 
who lived in the project areas reviewed and the percent and 
number of these students who received food stamps as heads 
of households. 



ESTIMATED NUMBER OF FULL-TIME STUDENTS 
RECEIVING FOOD STAMPS AS HEADS OF HOUSEHOLDS 



The extent of student participation in the food 
stamp program varied widely among the six schools. The 
table below shows the estimated number of full-time 
students residing in the project areas reviewed and the 



3 



276 



A-51604 



estimated percent and number receiving food stamps as heads 
of households some time during December 1975 through Febru- 



ary 1976. 
tion. 



University 



Exhibits A, B, and C give more detailed informa- 



Tampa 



Wisconsin 



Actual 
full-time 
enrollment 

1,663 

32,300 



Residing 
in 

project 

areas 
reviewed 

1,663 

31,653 



Receiving food stamp; 
Percent Number 



0.58 



2.33 



10 



736 



North Texas 
State 

Pennsylvania 



9,142 
14,354 



9,142 
12,693 



0.44 
1.73 



40 
220 



San Francisco 
State 

Portland 

Total 



14,520 
1,440 
73,419 



11,750 
1,320 
68,221 



13.11 
1.26 
3.76 



1,540 



17 



2,563 



The rate of participation at the three larger schools 
was higher than at the three smaller schools. Of the full- 
time students attending Pennsylvania, Wisconsin^ and San 
Francisco State and living in the project areas reviewed, 
5.4 percent received food stamps as heads of households. 
Of the full-time students attending Tampa, North Texas 
State, and Portland and living in the project areas reviewed 
only 0.6 percent received food stamps as heads of house- 
holds. Also, the rate of participation was higher at the 
three State-supported, lower attendance-cost schools than 
at the three private, higher attendance-cost schools. Of 
the full-time students attending Wisconsin, North Texas 
State, and San Francisco State and living in the project 
areas reviewed, 4.9 percent received food stamps as heads 
of households. Of the full-time students attending Tampa, 
Pennsylvania, and Portland and living in the project areas 
reviewed, 1.4 percent received food stamps as heads of 
households. In addition, for the four schools (Pennsyl- 
vania, North Texas State, Wisconsin, and San Francisco 
State) where our samples showed both graduates and under- 
graduates receiving food stamps as heads of households 
in the project areas reviewed, the percentage of graduate 
students who participated (4.6 percent) was higher than 
the percentage of undergraduate students (3.9 percent). 



4 



277 



A-51604 

According to various newspaper articles and editorials, 
college students represent a large part of the food stamp 
recipients in some localities. Particularly in smaller, 
rural counties, even a relatively low percentage of student 
food stamp participation in terras of a college's total en- 
rollment could have a major impact on local food stamp 
recipient rolls. For example, Dane County, Wisconsin, 
statistics indicated that about 2,500 households in the 
county were receiving food stamps during the latter part 
of 1975. From our sample, we estimated that about 736 of 
the 31,653 full-time Wisconsin student projected to be 
residing in the project areas reviewed received food stamps 
as heads of households. We also estimated that more than 
JO percent of these students resided in Dane County. Ac- 
:ordingly, although students receiving food stamps as heads 
Df households represented about 2-1/2 percent of the stud- 
ents enrolled full time at Wisconsin, these students 
represented a large part of Dane County's food stamp case- 
Load. 

ENCOME, BONOS VALUE, AND 
HOUSEHOLD CHARACTERISTICS FOR 
STUDENT FOOD STAMP RECIPIENTS 

The average income, food stamp bonus value, and 
liousehold-size characteristics for the 224 student food 
ntarap recipients in our samples are summarized below, 
lixhibits D, E, and F give more detailed information. Data 
[lor undergraduates and graduates is shown separately. 



Item Average 

Gross monthly income $250 

Monthly deductions from income $159 

Net monthly income for food 

stamp purposes $ 91 

Monthly food stamp bonus value $ 51 

Household members 1.6 



The average gross monthly income was $240 for under- 
traduates and $277 for graduates. Students at Portland had 
:he highest average monthly income — $511 — while those at 
lan Francisco State had the lowest — $200. Actual gross 
lonthly incomes of individual households ranged from zero 
:o $875. The highest amount — $875 — involved a household at 
•ennsylvania whose gross income was offset by the allowable 
leduction for tuition and mandatory fees. 



5 



278 



A-51604 

The types and average amounts of incomes reported by 
the student food stamp recipients in our sample are shown 
below. As shown, 18 students (about 8 percent of the 224 
recipients) reported no incomes. 



Source of income 


Number of 
students 
(note a) 


Average gross 
monthly incom 


Wage or salary 


87 


$200 


Loan 


49 


187 


Scholarshio 


49 


193 


Veterans benefits 


14 


275 


Social spcur itv 


10 


125 


Welfare 


26 


237 


Parental support 


15 


223 






Unemployment compensation 


10 


199 


Child support 


6 


247 


Other 


13 


153 


No income 


18 





a/Items do not add to 224 
more than one source of 


because some 
income . 


students reported 



Net income for food stamp purposes is gross income less 
allowable deductions for such items as rent, mortgage pay- 
ments, utilities, work expenses, tuition and mandatory 
fees, child care, alimony, disaster losses, medical costs, 
and taxes withheld from salaries or wages. The average 
net monthly income for food stamp purposes was $94 for 
undergraduates and $83 for graduates. Actual net monthly 
incomes of individual households ranged from zero to 
$417. The highest amount — $417 — involved a five-person 
household at Portland. 

The average monthly food stamp bonus value was $50 for 
undergraduates and $53 for graduates. Actual bonus values 
for individual households ranged from $12 to $218 a month. 
The highest amount — $218 — involved a seven-person household 
at San Francisco State. 



6 



279 



1-51604 



Of the 224 student food stamp recipients in our sample, 
.47, or two-thirds, were single-member households — that is, 
:he food stamp household consisted of only the student. In 
;ach of 63 cases, the student and other family members formed 
:he household. In each of the remaining 14 cases, the food 
itarap household comprised the student and either 1 or 2 
»ther students or friends. 



In accordance with instructions from your office, we 
id not obtain the comments of cognizant Federal, State, or 
ocal officials on this report. As your office instructed, 
-e will furnish copies of the report to the Department of 
.griculture and to the universities and food stamp project 
ffices covered in the review. 




Comptroller General 
of the United States 



281 



Contents 



Page 



iPPENDIX 
I 

II 

III 

IV 



VI 



University of Tampa — background 

information 2 

University of Wisconsin — background 

information 4 

North Texas State University — background 

information 6 

University of Pennsylvania — background 

information 8 

San Francisco State University — background 

information 10 

University of Portland — background 

information 12 



Estimated number of students residing in 
the project areas reviewed and estimated 
percent and number receiving food stamps 

- as heads of households — December 1975 
through February 1976 

Estimated number of undergraduate students 
residing in project areas reviewed and 
estimated percent and number receiving 
food stamps as heads of households — 
December 1975 through February 1976 



15 



16 



Estimated number of graduate students 
residing in the project areas reviewed 
and estimated percent and number receiving 
food stamps as heads of households — 
December 1975 through February 1976 17 

Incomes and bonus values for students in 

sample receiving food stamps 18 

Incomes and bonus values for undergraduate 

students in sample receiving food stamps 19 

Incomes and bonus values for graduate 

students in sample receiving food stamps 20 



283 

APPENDIXES 



1 



284 



APPENDIX I APPENDIX I 



UNIVERSITY OF TAMPA 

BACKGROUND INFORMATION 

University description 

The university is a small, private institution located a 
short distance from downtown Tampa, Florida. Liberal 
arts, education, and business are the primary undergrad- 
uate programs. The graduate division offers degrees in 
business administration and education. Extension courses 
are offered at nearby McDill Air Force Base. 

Enrollment 

Total enrollment is about 2,000 students. Full-time 
enrollment is 1,663 students, consisting of 1,563 
undergraduate and 100 graduate students. Full-time 
students must carry 12 or more units as undergraduates 
and 6 or more units as graduates. Extension students, 
all undergraduates, are considered full-time students 
if enrolled in six or more units. 

Student housing 

The university maintains four dormitories and owns and 
operates two off-campus apartment houses. These facilities 
house 811 students. Cooking facilities are available 
only in the apartments. Students who reside in the 
dormitories are required to choose one of three cafeteria 
meal plans. The remaining students (55 percent) live 
at home or rent housing elsewhere. 

Education-related financial aid 

About 25 percent of the students received loans and/or 
grants based on need. About 25 percent of the students 
also received athletic or scholastic scholarships. 
Some of these students received more than one type of 
financial assistance. Military personnel taking ex- 
tension courses participated in the Air Force's tui- 
tion assistance program. 



2 



285 



APPENDIX I APPENDIX I 



Cost of attendance 



The estimated average annual cost of attendance for a 
full-time undergraduate student living in university 
housing is $3,700. 



Item Annual cost 

Tuition and fees $2,300 
Room and board 1,400 



Total $3,700 

Graduate students pay $70 a unit each semester for tuition 
and fees. Room and board costs for full-time graduate 
students generally are the same as for full-time under- 
graduate students. 



3 



286 



APPENDIX II APPENDIX II 



UNIVERSITY OF WISCONSIN 
BACKGROUND INFORMATION 



University description 

The university is located in Madison, Wisconsin, the State 
capital. Except for Madison, the area is predominantly 
rural. The university, which is 1 of 13 publicly sup- 
ported degree-granting institutions in Wisconsin, offers 
a wide range of programs leading to undergraduate, gradu- 
ate, and professional degrees. 

Enrollment 

The university has a total enrollment of over 36,000 
students. The full-time enrollment is 32,300, consisting 
of 23,660 undergraduate students, 7,150 graduate students, 
and 1,490 professional (law and medical) students. A 
full-time undergraduate student must carry 12 or more 
credit hours, a graduate or a law student must carry 8 
or more credit hours, and a medical student must carry 
15 or more credit hours to be a full-time student. 

Student housing 

About 80 percent of all students live off campus; the 
remaining students live in university-operated residence 
halls and family apartments. Only the family apartments, 
which provide housing for 1,122 students, have cooking 
facilities. 

Education-related financial aid 

Grants, scholarships, loans, and work-study awards to 
8,914 recipients totaled $15.3 million. The graduate school 
provided support, in the form of research grants, fellow- 
ships, and teaching and project assistantships , to 5,668 
recipients totaling $18 million. In addition, the univer- 
sity processed 2,600 federally guaranteed student loans 
totaling $3.5 million. Some students received more than 
one type of financial assistance. 



4 



287 



APPENDIX II APPENDIX II 



Cost of attendance 

The estimated average annual cost of attendance for a 
full-time undergraduate student who is a Wisconsin 
resident living in university housing is $1,905. 

Item Annual cost 

Tuition and fees $ 630 

Room and board 1 , 275 

Total $ 1,905 

Tuition and fees for graduate and professional students 
range from $900 a year for a State resident to $3,450 a 
year for a non-State resident. Room and board costs are 
the same for all students. 



5 



APPENDIX III 



APPENDIX III 



NORTH TEXAS STATE UNIVERSITY 



BACKGROUND INFORMATION 



University description 

The university is located in Denton, Texas, about 40 miles 
north of Dallas. Operated by the State, the university 
offers a wide variety of programs leading to undergraduate 
and graduate degrees. 

Enrollment 

The university has a total enrollment of about 15,000. 
Total full-time enrollment is 9,142 students, consisting 
of 7,685 undergraduate and 1,457 graduate students. A 
full-time undergraduate student must carry 12 or more 
credit hours and a full-time graduate student must carry 
9 or more credit hours. 

Student housing 

The university has about 2,750 housing units available 
on campus. This housing is primarily dormitory rooms, 
although there are 50 family apartments for married 
students. Only the family apartments have cooking facili- 
ties. About 70 percent of the students commute from sur- 
rounding counties. 

Education-related financial aid 

The number of recipients and types of financial aid they 
received for the 1974-75 academic year are summarized 
below. Some students received more than one type of 
financial aid. 



Recipients 



Amount 



Grants 
Loans 

Scholarships 



1,224 
1,970 
1,123 



$ 684,840 
1,236,486 
348,800 



Total 



4,317 



$2,270,126 



289 



APPENDIX III APPENDIX III 



Cost of attendance 

The estimated average annual cost of attendance for a 

full-time graduate or undergraduate student living in 

university housing is $1,745. 

Item Annual cost 

Tuition and fees $ 375 

Room and board 1,370 



Total $1,745 



7 



290 



APPENDIX IV APPENDIX IV 



ONIVERSITY OF PENNSYLVANIA 

BACKGROUND INFORMATION 

University description 

The university, located in a residential area of 
Philadelphia, Pennsylvania, offers a wide variety of 
programs leading to undergraduate, graduate, and profes- 
sional degrees. It is funded primarily from private 
sources. 

Enrollment 

The total enrollment at the university is 20,370 students. 
Pull-time enrollment is 14,760 students, consisting of 
7,562 undergraduates and 7,198 graduate and professional 
students. Full-time undergraduate students are defined 
as those undergraduates taking four courses for which 
four course units of credit are given. Graduate students 
taking courses for which they receive three course units 
or those graduate students in a "dissertation status" 
are also considered full-time students. All professional 
students are considered full-time students. 

Student housing 

A total of 6,842 full-time students live in university- 
controlled housing. Cooking facilities are available 
in university housing occupied by 2,401 undergraduate and 
1,015 graduate students. The remaining full-time students 
live in nonuniversity housing on or off the campus. 

Education-related financial aid 

Financial assistance to 16,212 recipients totaled 

$21.6 million, as summarized below. Some students received 

more than one type of financial aid. 



8 



291 



APPENDIX IV APPENDIX IV 



Recipients Amount 

Scholarships 47 $ 46,435 

Loans 8,108 11,082,823 

Grants 2,366 2,363,130 

Work-study programs 2,275 1,700,000 

Teaching and research 

fellowships, 

assistantships, and 

associateships 986 3,155,200 

Miscellaneous State 

and private programs 2,430 3 ,239 ,512 

Total 16,212 $ 21,587,100 

Cost of attendance 

The estimated average annual cost of attendance for a 
full-time undergraduate student living in university 
housing is $5,733. 

Item Annual cost 

Tuition and fees $3,790 
Room and board 1,943 

Total $ 5,733 

Annual tuition and fees for graduate and professional 
students are $3,800 and $3,850, respectively. Room 
and board costs for these students range from $2,000 
to $3,825, 



9 



292 



APPENDIX V 



APPENDIX V 



SAN FRANCISCO STATE UNIVERSITY 



BACKGROUND INFORMATION 



University description 

The university is one of 19 campuses in the California 
State university and college system and is primarily 
State funded. The campus is located in the southwest 
section of San Francisco. The university offers programs 
leading to a full range of baccalaureate and master's 
degrees and offers doctorate programs in special education. 

Enrollment 

Total enrollment is 24,668 students. The full-time enroll- 
ment of 14,520 students includes 11,616 undergraduate and 
2,904 graduate students. A full-time undergraduate student 
must carry 12 or more units, and a full-time graduate student 
must carry 9 or more units. 

Student housing 

About 6 percent of the students live on campus in 3 

residence halls and 28 apartment units. These students 

have access to cooking facilities. Each residence hall 

has a kitchenette, and students are allowed to have appli- 
ances in their rooms. 

Education-related financial aid 

Financial assistance to 6,504 recipients totaled $5.8 mil- 
lion and is summarized below. Some students received 
more than one type of financial aid. 



Recipients 



Amount 



Scholarships 

Grants 

Loans 



734 
2,836 
2,934 



$ 209,083 
2,384,551 
3,191,564 



Total 



6, 504 



$5,785,198 



10 



293 



APPENDIX V 



APPENDIX V 



Cost of attendance 

There is no tuition charge for California residents. 
The estimated average annual cost of attendance for a 
full-time undergraduate or graduate student who is a 
State resident living in university housing is $1/351 



Undergraduate and graduate students who are not California 

residents pay annual tuition and fees of $1,032 and $774, 

respectively. Room and board costs are the same for all 
students. 



Item 



Annual cost 



Fees 

Room and board 



$ 191 
1,160 



Total 



$1,351 



11 



294 



APPENDIX VI APPENDIX VI 



UNIVERSITY OF PORTLAND 



BACKGROUND INFORMATION 



University description 

The university is a small, private institution located 
in the north residential section of Portland, Oregon. 
It offers a variety of programs on the undergraduate and 
graduate levels. 

Enrollment 

The university has a total enrollment of about 2,000 
students. The full-time enrollment of 1,440 students 
consists of 1,369 undergraduate and 71 graduate students. 
A full-time undergraduate student must carry 10 or more 
credit hours and a full-time graduate student must carry 
9 or more credit hours. 



Student housing 

The university's 5 dormitories have a capacity of 1,158 
students. For the spring 1976 semester, about one-third 
of the full-time students live on campus. 

Education-related financial aid 

Financial aid to 1,358 recipients totaled $988,921 during 
fiscal year 1975, as summarized below. Some students 
received more than one type of financial aid. 

Recipients Amount 

Scholarships 367 $ 77,972 

Loans 646 697,119 

Grants 345 213,830 

Total 1,358 $ 988,921 

The "University of Portland Effort" provided additional 
financial aid amounting to $503,829 to an undetermined 
number of students. This program involved a wide range 
of aid, including athletic scholarships, grants to 
minority students, and funds for student employment. 



12 



295 



APPENDIX VI APPENDIX VI 



Cost of attendance 

The estimated average annual cost of attendance for a 
full-time undergraduate or graduate student living in 
university housing is $3,550. 

Item Annual cost 

Tuition and fees $2,300 
Room and board 1 , 250 

Total $3,550 



13 



296 
EXHIBITS 



14 



EXHIBIT A EXHIBIT A 

ESTIMATED NUMBER OF STUDENTS RESIDING IN THE PROJECT 



AREAS REVIEWED AND ESTIMATED PERCENT AND NUMBER 
RECEIVING FOOD STAMPS AS HEADS OF HOUSEHOLDS - 
DECEMBER 1975 THROUGH FEBRUARY 1976 

Residing in 
Actual project 
full-time areas Receiving food stamps 



University 


enrollment 


reviewed 


Percent 


Numoer 


Tampa 


1,663 


1,663 


0.58 


10 


Wisconsin 


32,300 


31,653 


2.33 


736 


North Texas State 


9,142 


9,142 


0.44 


40 


Pennsylvania 


a/ 14,354 


12,693 


1.73 


220 


San Francisco State 


14,520 


11,750 


13.11 


1,540 


Portland 


1,440 


1,320 


1.26 


17 


Total 


73,419 


68,221 


b/ 3.76 


b/ 2,563 



a/Excludes 406 full-time students who withheld permission for the 
university to publish their names and addresses in the student 
directory. 

b/Subject to sampling variations. Due to these variations, there 
" is a 95-percent proDability that the actual percent lies between 

3.24 and 4.28. The probability is the same that the actual number 

of students lies between 2,225 and 2,901. 



15 



298 

EXHIBIT B EXHIBIT B 

ESTIMATED NUMBER OF UNDERGRADUATE STUDENTS RESIDING IN 



THE PROJECT AREAS REVIEWED AND ESTIMATED PERCENT AND 
NUMBER RECEIVING FOOD STAMPS AS HEADS OF HOUSEHOLDS — 
DECEMBER 1975 THROUGH FEBRUARY 1976 





Actual 


Residing 


in 








full-time 


project 










undergraduate 


areas 


Receivina 


food stamDs 


Univer s itv 


enrollment 


reviewed 


Percent 


Number 


Tampa 


1,563 


1,563 


0. 


61 


10 


Wiscons in 


23, 660 


23,593 


1. 


98 


467 


North Texas State 


7,685 


7,685 


0. 


35 


27 


Pennsylvania 


a/ 7,404 


6,981 


1. 


28 


89 


San Francisco 












State 


11,616 


9 ,397 


12. 


45 


1,170 


Portland 


1,369 


1,253 


1. 


32 


17 


Total 


53,297 


50,472 


b/ 3. 


52 


b/ 1,780 



a/Excludes 158 full-time undergraduates who withheld permission 
for the university to publish their names and addresses in the 
student directory. 



b/Subject to sampling variations. Due to these variations, 
there is a 95-percent probability that the actual percent 
lies between 2.94 and 4.10. The probability is the same 
that the actual number of students lies between 1,501 and 
2,059. 



15 



299 

EXHIBIT C EXHIBIT C 

ESTIMATED NUMBER OF GRADUATE STUDENTS RESIDING IN THE 

PROJECT AREAS REVIEWED AND ESTIMATED PERCENT AND 
NUMBER RECEIVING FOOD STAMPS AS HEADS OF HOUSEHOLDS — 
DECEMBER 1975 THROUGH FEBRUARY 1976 



Actual Residing in 
full-time project 
graduate areas Receiving food stamps 



University 


enrollment 


reviewed 


Percent 


Numbe 


Tampa 


100 


100 


0.00 





Wisconsin 


8,640 


8,060 


3.34 


269 


Nortn Texas State 


1,457 


1,457 


0.91 


13 


Pennsylvania 


a/ 6,950 


5,712 


2. 29 


131 


San Francisco State 


2,904 


2,353 


15.74 


370 


Portland 


71 


67 


0.00 





Total 


20,122 


17,749 


b/ 4.42 


b/ 733 



a/Excludes 248 full-time graduate students who withheld permis- 
sion for the university to publish their names and addresses 
in the student directory. 

b/Subject to sampling variations. Due to these variations, 
I there is a 95-percent probability that the actual percent 
lies between 3.30 and 5.54. The prooability is the same 
that the actual number of students lies between 594 and 972. 



17 



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20 



303 

APPENDIX V 
Local Community Groups 



305 



E DE LA 
JOSEPH F 
WALTER B. JONES. 



JOHN MCLCHER. MONT. 



WEAVER. OREO. 



teniae of fteprefientatibea 
Committee on Agriculture 

•Room 1301. ILongtDortt »ouse €>Uitt JSnObfna 

Maafjington, 3B.C. 20515 

November 19. 1975 



IIOHTOWER. TEX. 
EY BEDELL. IOWA 
IEW F. MC HUGH, K 
ENGLISH, OK LA, 



L. T. EASLEY. 



The House Committee on Agriculture has begun a comprehensive review 
of the Food Stamp program. Crucial to the Committee's understanding of the 
program are the views of local groups who have had direct contact with Food 
Stamp applicants and recipients. Accordingly, we have prepared the enclosed 
questionnaire in an effort to obtain some of these views. The results will 
be summarized and the summary will be made available to the Committee for 
its consideration. We will also provide you with a copy of the summary. 

The questionnaire is designed to provide the opportunity for the analysis 
of the views of local groups over a wide range of food stamp topics. Quite 
likely, however, there will be topics you consider important which have been 
excluded. Please feel free to supplement the questionnaire with any addit- 
ional information you believe would be useful to the Committee. We are par- 
ticularly interested in having any survey results or studies which you may 
have done and that remain relevant to current problems and procedures. 

We would appreciate having the questionnaire returned as soon as possible 
but no later than December 31. It should be addressed to: 



Mr. James E. Springfield 
House Committee on Agriculture 
1301 Longworth House Office Building 
Washington, D.C. 20515 

If you have any questions, please call Mr. Springfield at 202-225-2171. 
Thank you for your cooperation. 



Sincerely, 



Thomas S. Foley 
Chairman 



307 



-l- 

Pood Stamp Questionnaire 

Objective — The purpose of this questionnaire is to collect* information 
from local groups who have had direct contact with Pood Stanp applicants and 
recipients. It provides the opportunity for such groups to identify 
problems and to suggest changes. It also asks for funding information. 
' The information contained on the returned questionnaire will be anal- 
ysed and reported to the House Committee on Agriculture for its use 
in considering possible legislative changes in the Program. 

Directions: Please respond on the basis of the operation of the program 
in your geographic area. 

A number of questions provide you the opportunity to explain your 
answer and to make recommendations for changes. If additional space is 
needed, please attach additional pages and identify by number the questions 
being answered. These explanations and recommendations will be given 
very careful consideration. 

Respondent Information; ^ 

I . Name: 
Title: 

Organization: 

Address: 

Telephone: 



308 



-2- 



I. What types of services does your organization provide? Please 
check yes or no and add any carmen ts you may have. 

YES NO 



A. Assisting clients in Fair Hearing 
procedure 

Caiments: 



B. Pre- screening (Explaining eligibility 
requirements of food stamp program 
to potential applicants) 

Garments: 



C. Distributing applications 
Carmen ts: 



D. Assisting clients in completing 
applications 

Carmen ts: 



E. Funds and/or food to meet emer- 
gency situations 

Carmen ts: 



F. Funds to aid recipient with purchase 

price 

Carmen ts: 



G. Language interpreters 
Caiments: 



309 



H. Nutrition Education 
Comments J 



X. Transpor*-.a t: .on 
Carmen ts: 



J. Other 'spf^cify) 

1. 

Caments: 

2. 

Comments: 



Which, if any, of the following groups in your area have special 
problems in applying for and being certified for food stamps? 

Please check the response applicable to your experience. If 

your answer is yes, please explain the problem and give any recarmen- 

dation you may have for alleviating the problem. 

YES NO NO EXPERIENCE 

.. Aliens 



Explanation: 



Recommendation s : 



B. Disabled: 
Explanation: 



Recomrnendations : 



310 



(Continued) Which, if any, of the following groups in your area 
have special problems in applying for and being certified for food stamps? 



YES NO NO EXPERIENCE 



C. Elderly 

Explanation: 



Reccrrmenda tions : 



D. Indians 

Explanation: 



Reoanmenda tions : 



E. Migrants 

Explanation: 



Recommendations : 



F. Military 

Explanation: 



Reconnendations : 



311 



-5- 

(Contijnued) Which, if any, of the following groups in your area have 
special problems in applying for and being certified for food stamps? 

YES NO NO EXPERIENCE 

G. Strikers 

Explanation: 

Recormendations: 



H. Students 

Explanation: 



Recommendations: 

I. Unemployed 
Explanation: 

Reccrmiendations : 



J. Low Income En ployed 
Explanation: 

Recommendations : 



312 



(Continued) Which, if any, of the following groups in your area have 
special problems in applying for and being certified for food stamps? 



K. Others (specify) 
1. 



Explanation: 



Recommendations : 



2. 



Explanation : 



Recommendations: 



III. In determining and/or calculating income and resources, which, if any, 
of the following aspects do you consider major problem areas for food 
stamp applicants? 



YES NO 



A. Gross Income 
Explanation: 



Recommendation : 



B. Income Deductions 
1. Shelter Costs 
Explanation: 



Recommendations: 



313 



-7- 

III. (Continued) In determining and/or calculating income and resources, 
which, if any, of the following aspects do you consider major problem 
areas for food stamp applicants? 



YES NO 



2. Medical Expense 
Explanation: 

ReccrtTiendations : 

3. Child Care 
Explanation: 

Recommendations : 



4. Tuition and fees 
Explanation: 



Reccnrrendations : 



5. Disaster (including funeral expenses) YE S_ NO. 

Explanation: 



Recommendations : 



6. Vendor and/or In Kind payments 
Explanation: 



Recomrrendations : 



314 



-8- 

IU. (Continued) In determining and/or calculating income and resources, 
which, if any, of the following aspects do you consider major problem 
areas for food stamp applicants? 

7. Other (please specify) 

a. 



Explanation : 



Recommendations : 



b. 



Explanation: 



Recommendations: 



Resource Limitations 
Explanation: 



Reconrrendations : 



IV. In connection with the way the program is being administered in your 
Locality, which if any of the following administrative procedures 
do you consider major problem areas? Pl e ase check yes, no, or no 
experience. If your answer is yes, please explain the problem and 
give any recommendations you may have for alleviating the problem. 

YES NO NO EXPERIENCE 

A. Coupon Issuance 



Explanation: 



Recommendations: 



YES NO 



315 



IV. (Continued) In connection with the way the program is being 

administered in your locality, which if any of the following admin- 
istrative procedures do you consider major problem areas? 

YES NO NO EXPERIENCE 

B. Fair Hearings 

Explanation: 



Reoommendations : 



C. NPA Certification - 
Explanation: 



Recommendations: 



D. NPA Recertif ication 
Explanation: 



Recommendations : 



E. Outreach 

Explanation: 



Reocrtrnendaticns : 



75-969 O - 76 - 21 



316 



-10- 

IV. (Continued) In connection with the way the program is being administered 
in your locality, which if any of the following administrative procedures 
do you consider major problem areas? 

YES NO NO EXPERIENCE 

F. PA Certification 

Explanation: 



Recontnendations : 



G. PA Recertification 
Explanation: 



Recommendations : 



H. Quality Control (Interviews) 
Explanation: 



Recorrmendations : 



I. Recipient Claims 
Explanation: 



Recommendations : 



317 



-li- 

IV. (Continued) In connection with the way the program is being administered 
in your locality, which if any of the following administrative pro- 
cedures do you consider major problem areas? 

YES NO NO EXPERIENCE 

J. Retroactive Benefits 

Explanation: 

Recanmendations: 

K. Verification (Documents and receipts 

needed by applicant to support income, 
deductions, and resources) 

Explanation: 
Recommendations: 

L. Work Registration 

Explanation: 

Recommendations: 

- M. Other (please specify) 

1. 

Explanation: 

RecomtTendations : 

2. 

Explanation : 



Recommendations : 



318 



-12- 

V. Which of the following problems, if any, do food stanp recipients have 
in applying for food stamps in your area? Please check yes or no. If 
your answer is yes, please explain the problem and give any recommendations 
you may have for alleviating the problem. 

YES NO 

A. Eligibility Workers have Insuf- 
ficient Training 

Explanation: 



Recommendations : 



B. Rude Behavior 
Explanation: 



Recommendations : 



C. Inadequate Number of Certifi- 
cation Centers 



Explanation: 



Reccrmendationa : 



D. Inconvenient Hours of 
Operation 



Explanation: 



Reccrmendations : 



E. Long Lines 

Explanation: 



Reccmmendat ions : 



319 



-13- 

V. (Continued) Which of the following problems, if any, do food stamp 
recipients have in applying for food 8 taupe in your area? 

YES NO 

F. Long Wait for Appointments 
Explanation : 



Recommendations: 

G. No Bilingual Personnel 
Explanation : 

Reccnrnendations : 

H. Insufficient Staffing 
Explanation: 

Recc m mendations : • 

I. Transportation to Food Stanp Office 
Explanation: 

Recommendations : 

J. Other (please specify) 

1. 

Explanation : 



Reconr.T3i>d a tions : 



320 



-14- 

V. (Continued) Which other problems, if any, do food stamp recipients have 
in applying for food stamps in your area? 

2. 



Explanation : 



Recomrendations : 



VT. Which of the following problems, if any, do food stamp recipients 
have in purchasing food stamps at issuance centers? Please check 
yes or no. If your answer is yes, please explain the problem and 
give any recommendations you may have for alleviating the problem. 

YES NO 

A. Rude Behavior 
Explanation: 



Recommendations ; 



B. Inconvenient Hours of Operation 
Explanation: 



Recommendations: 



C. Inconvenient Locations 
Explanation: 



Recommendations : 



D. Issuance Centers Withdraw Service 
When Caseload Heavy 



Explanation: 



Recommendations: 



321 



-15- 



VI. (Continued) Which of the following problems, if any, do food stamp 
recipients have in purchasing food stamps at issuance centers? 



E. Long Lines 
Explanation: 

Reoomrendations : 



F. No Bilingual Personnel 
Explanation: 



Recommendations : 



G. No Changemaking 
Explanation: 



Reconmencatioris : 



H. Other (Please specify) 
1. 



Explanation : 



Recommendations : 



YES NO 



Explanation: 



322 



-16- 

VII A. Is Your organization an Issuance Center? yes no _ 

B. . If your answer is yes, what fee do you 

receive per transaction? 

VIII. Please briefly describe your source (s) of funding and percentage 
each source. 

Percentage 

A. Federal (please indicate agencies 

(1) . 

(2) . 

(3) 

Carmen ts: 



1. Do you receive funding from the Community Food and Nutrition (CFN) 
Program (formerly the Emergency Food and Medical Services 
Program) of the Community Services Administration (formerly OBO)? 

Yes No 



2. If you do, what services do you provide with regard to the Food 
Stamp Program, using all of part of those funds? Please indicate 
each service and, if possible, percentage of CFN funds for 

each service. 



B. State (Please indicate agencies) Percentage 

(1) 

(2) 

(3) 

Comments: 

C. Local, County, City, etc. (please indicate agencies) 

(1) Percentage 

(2) _ 

(3) _ 

Comments: 



D. Other (please indicate specific source — e.g., foundation, church, etc. 
1. Percentage 

Comments: 



323 



-17- 



2 . Percentage 



Contents: 



IX. Describe briefly how your organization became involved 
in food stamp Outreach. 



X. Outreach — On the basis of experience in your area, which outreach 
techniques have proved effective and ineffective and explain the basis 
for your assessment. 

Effective Ineffective No Experience 
Please circle appropriate number. 

A. Information Distributed 

at Grocers 12 3 



Explanation : 



Information Distributed 
to Community Groups 



Explanation: 



C. Information Distributed to 
Other Groups (List .groups) 



1. 



Explanation: 



2. 



Explanation: 

D. Door-to-Door Campaigns 
Explanation: 



324 



-18- 

X. (Continued) Outreach — On the basis of experience in your area, 
which outreach techniques have proved effective and ineffective and 
explain the basis for your assessment. 

Effective Ineffective No Experience 
E. Press Releases 1 2 3 



Explanation: 



F. IV and/or Radio Spots 1 2 3 



Explanation : 



G. Telephone Campaigns (hot line) 1 2 3 



Explanation : 



H. Other (specify) 

1. 



Explanation : 



2. 



Explanation: 



XI. The Variable Purchase Option, which allows the household to buy less 
than its normal allotment, must now be available to all recipients 
Should the variable purchase option be: (Check onlv one) 

A. Mandatory? (Should States be required to offer the Variable Purchase 

Option? ) 

Explanation: 



B. State Option (Should States be allowed to decide whether or not they 
will offer the Variable Purchase Option?) 



Explanation: 



325 



-19- 

XI. (Continued) The Variable Purchase Option mist now be available to 

all recipients. Should the variable purchase option be: (Check only one) 

C. Prohibited? (Should States be prohibited from offering the Variable 
Purchase Option?) 



Explanation: 



XII. Briefly describe any formal or informal affiliation you may 

have with the Food Stamp Office in your area. How was that affiliation 
achieved, and how is it maintained? Please include in your answer 
the number of volunteers you have working in the Food Stamp office 
and the services they perform. If you have no affiliation with the 
Food Stamp Office, please explain why. 



XIII. Please identify up to five of what you consider to be the most serious 
problems in the Food Stamp program, from the most serious to the least 
serious. These problems may repeat problems already noted above. 
Briefly explain your reasons for ranking the problems as you do in- 
cluding any available data substantiating your views. 

A. Identification (most serious) 



Explanation: 



B. Identification 



Explanation : 



C. Identification 



Explanation: 



D. Identification 



Explanation: 



E. Identification (less serious) 
Explanation: 



326 



-20- 

XIV. Please identify up to five aspects of the program that you consider most 
satisfactory and rank from A to E below. Briefly explain your reasons 
for ranking the listing as you do including any available data substantiating 
your views. 

A. Identification (most satisfactory) 

Explanation: 

B. Identification 

Explanation: 

C. Identification 

Explanation: 

D. Identification 

Explanation: 



E. Identification (less satisfactory) 

Explanation: 



327 



-l- 

SURVEY OF LOCAL COMMUNITY GROUPS ON FOOD STAMPS 



As part of the Food Stamp Study by the House Committee 
on Agriculture, an effort was made to ascertain perceptions 
of the Food Stamp Program by people who worked on it. In 
order to do this, questionnaires were sent to State and 
local administrators of the program (a separate analysis 
of the responses to this questionnaire has been completed 
by the Committee Staff) , and to local community groups who 
had direct contact with food stamp applicants and recipients. 
The latter is the subject of this analysis. 

While it was possible to select a random sample for 
the questionnaire sent to the administrators, it should be 
emphasized that it was impossible to do so for the community 
groups, and there is no way to test the statistical validity 
of the community group sample. There is no available universe 
of such groups from which to draw a random sample. Therefore, 
the results should be seen as the representation only of 
those 228 organizations which responded. Nevertheless, as 
far as the Committee is aware, the responses provide a much 
wider-based perspective of the program as seen by recipient- 
oriented groups than has previously been available. 

The questionnaire was sent to 212 organizations selected 
from lists of groups obtained from people experienced in 
providing potentially eligible individuals with information 
concerning those government-funded programs designed to 
assist them in meeting their basic daily needs. The organi- 
zations selected included such groups as legal aid and 
services bureaus, community action councils, county child 
development programs, church social service groups, hunger 
task forces, family health centers, and welfare rights 
organizations. 

Generally most of these groups are interested in improving 
what they view as the ineffective delivery of service programs 
and in making these programs more accessible to those who 
are eligible. 

With this questionnaire we wished to ascertain from 
these groups their perceptions of problem areas in the Food 
Stamp Program and to allow them an opportunity to suggest 
changes. We also were interested in gathering information 
on the types of services the groups provided food stamp 
applicants and recipients. Space was provided in each 
question for comments and recommendations. Since the admin- 
istration of the Food Stamp Program, as well as the problems 
applicants and recipients encounter, can vary among project 
areas, it was felt to be important to obtain information 
from as wide a geographical area as possible. 



328 



Many of the groups copied the questionnaire and sent it 
to other organizations whom they felt had pertinent food stamp 
experience. A total of 228 were returned to the Committee on 
Agriculture by the January 31, 1976, deadline and are included 
in this analysis. Responses were received from groups in 37 
states, with approximately two-thirds from urban and suburban 
areas and the remainder from rural locations. Most respondents 
answered the questionnaire from the perspective of their specific 
organization's experience, while a small number described their 
personal encounters with food stamp applicants and recipients. 

I . Community Group Services 

Community groups were asked what types of service they 
provided to food stamp applicants and recipients. Nine types of 
services were listed and respondents were asked to check each 
one yes or no. The table below shows the result of this question. 

Number Percent Number Percent 



1 . 



2. 



Prescreening 
Yes 
No 

No Response 



6. 



206 
21 
1 



Assisting Clients 

in Completing 

Application 

Yes 180 
No 48 
No Response 

Assisting Clients 
in Fair Hearings 
Process 

Yes 169 
No 57 
No Response 2 



90 
9 
1 



79 
21 




74 
25 
1 



Funds and/or 
Food to Meet 
Emergencies 

Yes 

No 

No Response 

Distributing 
Applications 

Yes 

No 

No Response 

Language 
Interpreter 

Yes 

No 

No Response 



121 
102 

5 



106 
118 
4 



80 
145 

3 



53 
45 

2 



46 

52 
3 



36 
64 
1 



4 . 



Transportation 
Yes 
No 

No Response 

Nutrition 
Education 

Yes 

No 

No Response 



153 
72 
3 



141 
81 
6 



67 
32 
1 



62 
36 
3 



Funds to Aid 
Recipient with 
Purchase Price 

Yes 

No 

No Response 



74 
150 
4 



32 
66 
2 



329 



-3- 



1 . Prescreening 

The types of prescreening services offered by the 
community groups varied widely from printed material dis- 
played in waiting rooms to individual interviews. 

Responses indicated that applicants were usually dealt 
with on an individual basis; however, some groups offered 
training conferences, community meetings, and workshops. 
Many provided written and oral guidelines for completing 
food stamp application forms, as well as information on 
types of documentation required for food stamp certification. 

2 . Assistance with Applications 

Most community groups were prepared to assist the appli- 
cant in completing the application forms so that correct and 
complete data would be given to the food stamp worker. 

A number of people commented that applicants were con- 
fused by the forms. One director of a community education 
group said: "Many of our clients are illiterate and request 
our assistance in completing the application because they 
are often suspicious of food stamp personnel and fear that 
food stamp workers will use their lack of education to deny 
them food or reduce the amount of stamps they will receive." 

3 . Fair Hearings 

Respondents stated they often tried to solve a recipient's 
food stamp problem through informal discussions with the Food 
Stamp office rather than by requesting a Fair Hearing. When 
the need for a Fair Hearing became apparent, some community 
groups referred the client to a legal aid office or a welfare 
rights group. However, most community groups indicated that 
since applicants frequently had little knowledge of food 
stamp regulations and were many times intimidated by Food 
Stamp officials, they filed Fair Hearing requests for the 
client and/or represented or accompanied the client to the 
hearing. 

To encourage wider dissemination of Fair Hearing infor- 
mation, one local services group conducted 15 statewide 
training seminars, between June, 1974, and February, 1975, 
for 600 people. Subsequent to those seminars, an additional 
twelve were held along with 126 public information meetings 
involving approximately 3,000 persons, as well as 28 legal 
rights seminars, involving 400 people. 



330 

-4- 



4 . Transportation 

A majority of community groups assisted with transporta- 
tion to and from food stamp offices. Those agencies which 
did not provide transportation usually referred clients to 
agencies that did. 

5. Nutrition Education 

Nutrition education was provided by over half the community 
groups who responded. Besides providing nutrition literature, 
some agencies employed a staff nutritionist, sponsored food 
festivals and seminars, and presented nutrition information at 
community meetings. In addition, some groups held cooking 
classes and offered assistance in budgeting. Several men- 
tioned Head Start Parents, Community Food and Nutrition Programs 
and Comprehensive Nutrition programs for the elderly as examples 
of agencies with whom they cooperated in nutrition education 
endeavors. 

6 . Emergency Situations 

Community groups responded to food and/or emergency situa- 
tions in varying ways. Some had sponsored hot meal programs 
or had established emergency food shelves. On occasion indivi- 
dual volunteers and organizations provided food and/or a small 
amount of money for specific cases and in a few instances money 
was given from personal resources. 

Several groups said they referred clients in such situations 
to food pantries or to organizations which provided emergency 
food assistance. 

7. Distribute Applications 

About half the groups responding distributed food stamp 
applications. Of those who did not, a number said their local 
food stamp office refused to provide them with applications. 
In these localities, the applicant must obtain the forms from 
the food stamp office. 

As a result, many community groups who wished to distribute 
food stamp forms and to assist the client in completing them 
were unable to do so. Those agencies who did not distribute 
forms generally referred the applicant to the food stamp office. 

8 . Language Interpreters 

Language interpreters were available in a number of community 
group offices, as the table indicates. A few of those who 
commented they did not have interpreters or bilingual personnel 
said there was little need for this service in their area. 



331 

-5- 



9 . Funds for Purchase Price 

The majority of community groups did not advance funds 
to aid recipients with their food stamp purchase price. Those 
who did frequently commented that this was done only on an 
emergency basis. A number of groups said they referred the 
person to organizations which could provide financial assistance. 



II . Relationship to Food Stamp Office 

Community groups were asked to describe any formal or 
informal affilitation with their local food stamp office and 
how that affiliation was achieved. The purpose of this 
question was to determine what type of relationship, if any, 
community groups had been able to establish with their local 
food stamp office. We also hoped to ascertain whether the 
groups viewed this relationship as productive and useful. 
The table below reflects the type of relationships groups 
had with food stamp offices. 





Number 


Percent 


Formal 


23* 


10 


Informal 


118* 


51 


No Affiliation 


41 


18 


No Response 


49 


21 
100 



Those groups having formal or contractual arrangements 
with the food stamp office generally were involved in pre- 
screening and outreach activities. Some of the groups received 
formal training from food stamp office personnel and most of 
them had scheduled periodic meetings to keep the lines of 
communication open. 

Those groups with informal affiliations generally seemed 
to maintain their relationship with the food stamp office 
through close personal contact. Some groups had held joint 
press conferences with food stamp workers, and a number men- 
tioned they had established a rapport with case workers 



* Three groups said they had both formal and informal 
relationships. 



75-969 O - 76 - 22 



332 



-6- 



rather than supervisors. A couple of organizations had both 
formal and informal affiliations with the food stamp office 
while a few others with informal affiliations anticipated 
contractual arrangements in the near future. 

The informal affiliations ranged from distributing 
information for the food stamp office to scheduled meetings 
with food stamp personnel to discuss mutual problems. A 
food stamp coordinator in a community action agency said 
of his informal affiliation, "Our relations are often strained, 
but are relaxed by our continual cooperation in our clearly 
defined effort to aid the needy." 

Most of those who had no affiliation with the food stamp 
office stated they had unsuccessfully attempted to establish 
one. A committee member of a County Assistance Program said 
most of her organization's meetings were confrontations. 
"They treat us," she said, "with the same coldness and haughti- 
ness as they treat the recipients." A worker for a community 
action committee commented that "the program is the respon- 
sibility of the County Welfare Department. We serve as 
information and referral only. To date, we have had to 
seek out the information." 

Very few groups had volunteers working in the food stamp 
office. Of those who commented on this, many said it was 
because the food stamp office would not allow it. Among 
those groups who did, a director of a council of economic 
opportunity stated that her council has "organized and trained 
a team of 20 prescreeners who volunteer throughout the county 
and prescreen within the Department of Social Services." 



Ill . Income and Resource Determinations and Verifications 

Community groups were asked what were the major problem 
areas for food stamp applicants in determining and/or calcu- 
lating income and resources. Eight areas were listed and 
respondents were asked to check each one yes or no. 
A table showing the responses to this question follows. 



333 



-7- 



Number Percent 



Number Percent 



1. Shelter Costs 

Yes 128 

No 69 

No Response 31 

2. Medical Expenses 

Yes 125 

No 76 

No Response 27 

3. Resource Limit 

Yes 104 

No 61 

No Response 6 3 

4 . Gross Income 

Yes 95 

No 102 

No Response 31 



56 
30 
14 



55 
33 
12 



46 
27 
28 



42 
45 
14 



5. 



6. 



7. 



8. 



Tuition and 
Fees 

Yes 

No 

No Response 

Vendor/In Kind 
Yes 
No 

No Response 

Disaster 
Yes 
No 

No Response 

Child Care 
Yes 
No 

No Response 



68 
108 
52 



67 
97 
64 



64 
119 
45 



45 
137 
46 



30 
47 
23 



29 
43 
28 



28 
52 
20 



20 
60 
20 



1. Shelter Costs 

Under present regulations shelter costs in excess of 30 percent 
of household income can be deducted from the household's income. 
The shelter deduction is calculated based on the household's income 
after all other allowable deductions have been made. The shelter 
costs include rent or mortgage payments, utility payments for 
heating, electricity, water, sewer or garbage collection, and the 
basic service fee for one telephone, as well as property taxes, 
State and local assessments, and insurance on the home itself. 

The States can develop a standard utility allowance, which 
must be reviewed annually, for use in calculating shelter costs, 
but this standard must be approved by the Food and Nutrition Ser- 
vice. When applying for food stamps or being recertified, a 
household can use its actual utility costs if it can verify them 
by presenting paid bills for previous months rather than using 
the State's standard utility allowance. The States can also 
develop with FNS approval other standard allowances to reflect 
other types of variations (e.g.. , different standards for urban 
and rural areas) . 

In addition, the Food and Nutrition Service has developed 
a shelter standard chart which the States may use in determining 
the amount of shelter costs to be deducted from the household's 
income . 



334 



-8- 



Many of those who said shelter costs were a problem felt 
the shelter standard was inadequate. Contributing to that 
inadequacy was rising inflation and rapidly increasing utility 
costs. A number of people said allowances should be made for 
more shelter costs such as home repair expenses. Complex and 
confusing regulations, as well as the fact that the very poor 
and the elderly often have few shelter costs were seen 
as additional problems. The most frequent recommendation was 
a standard deduction. Some people suggested the use of an 
optional standard deduction, allowing the recipient to decide 
which was preferred, itemization of expenses or a standard 
deduction. 

2 . Medical Expenses 

To determine basis of issuance, an applicant's income 
and expenses are converted to monthly amounts usually through 
averaging income and expenses anticipated during the certifi- 
cation period. Any one-time payments made prior to certifi- 
cation or recertif ication are not allowed as a deduction 
during the certification period. In addition, regulations 
provide only medical expenses in excess of $10 can be deducted 
from a household's income, and the amount deducted is that 
amount actually paid during the certification period. If the 
recipient pays additional medical bills during the certification 
period, the recipient must return to the food stamp office to 
apply for a downward adjustment of the purchase price of the 
recipient's food stamp allotment. Thus, those medical bills 
which can be averaged are generally those that occur on a 
fixed basis. This treatment of medical expenses was 
considered to be unfair and a major problem area by many 
respondents. A large number suggested that anticipated medical 
expenses for which the recipient had been billed but had not 
paid be deducted. 

Many people said all medical expenses including non- 
prescription drugs should be deducted and the requirement that 
only paid monthly medical expenses of over $10 can be deducted 
should be dropped. 

3 . Resources 

A number of respondents did not answer this question 
although they did answer all other questions. In reviewing 
the layout of the questionnaire, it became obvious that place- 
ment of the resource question was such that respondents could 



335 

-9- 



easily have overlooked it. If the statistics in the table 
for this question had been based only on those who had answered 
the question, resources would rank as the second most prevalent 
problem. Therefore, a discussion of comments on resources has 
been included. 

For food stamp purposes, resources are considered to be 
liquid and nonliquid assets, the value of which is the fair 
market value less encumberances . 

A household with two or more members with at least one 
member age 60 or over, will be denied food stamps if its non- 
exempt resources exceed $3,000. For all other households 
including all one-person households, the non-exempt resource 
limit is $1,500. Exempt resources include but are not limited 
to a home and lot normal to the community, one licensed vehicle 
plus any other vehicles necessary for the employment of household 
members, personal effects, household goods, the cash value of 
life insurance policies and pension funds, property which pro- 
duces income consistent with its fair market value such as 
investment property returning rental income normal to its use 
or other property essential to employment, a farmer's machinery, 
livestock, or land and goods, property, and vehicles used by 
self-employed people in their occupations. Verification of 
non-exempt resources is at the discretion of the food stamp 
eligibility worker. 

Liquid assets include but are not limited to cash on 
hand, bank accounts, and stocks and bonds; while non-liquid 
resources can be real property such as land and buildings, 
and personal property such as boats and aircraft. 

Most respondents felt that the resource limits of $1,500 
and $3,000 were unrealistic because of rising inflation. In 
addition, a number said recipients had difficulty selling 
non-liquid assets, particularly real estate, in the present 
economy. Suggestions here included allowing the otherwise 
qualified applicant to receive food stamp assistance as long 
as the applicant's property was listed for sale. 

Many respondents said resource levels should be higher 
for the working poor and the elderly who often saved funds 
for emergencies such as medical costs and funeral expenses. 

4 . Gross Income 

For food stamp purposes, gross income includes, but is 
not limited to, wages, the actual value of housing received 
from the employer in lieu of or supplemental to the employee's 



336 



-10- 



income, but not to exceed $25, training allowances, public 
assistance payments, educational grants, child support, 
alimony and SSI, annunities, pensions, and vendor payments. 

Complex and confusing rules and verification difficulties 
were most frequently mentioned as causing problems in deter- 
mining gross income. In addition, special income verification 
problems were cited for farmers and migrant farmworkers. Some 
working poor and migrant farmworkers were said to receive 
their wages in cash; thus they did not have a check stub and 
could not verify their income. 

A few respondents said verbal confirmation of income 
with the applicant's employer by the eligibility worker 
embarrassed the applicant. There were several reports too 
that some employer's and crew leaders in migrant farmworker 
cases told the food stamp office the employee was receiving 
higher wages than was true. 

Some people interpreted the question as asking whether 

gross rather than net income should be the determining factor 

for food stamp eligibility. All said net rather than gross 
income should be used. 

5 . Tuition and Mandatory Fees 

Current food stamp regulations allow applicants to deduct 
expenses for tuition and mandatory fees assessed by educational 
institutions. No deductions are allowed for other educational 
expenses, such as books, supplies and transportation. Counted 
in determining a household's income are scholarships, educa- 
tional grants, fellowships, deferred payment loans, and 
veteran's educational benefits. 

The majority of those who viewed tuition and fees as a 
problem said not enough school expenses were deductible. Many 
thought that deductions should be allowed for books and other 
educational expenses. Also cited as problems were the complex 
method for calculating student income and provisions allowing 
grants, fellowships and the like to be included in the deter- 
minations of a household's income. 



6 . Vendor and In-Kind Income 

Vendor and in-kind shelter payments are included as income 
for food stamp purposes. The value of in-kind shelter is con- 
sidered to be the actual value of housing received from an 



337 

-li- 



employer in kind, in lieu of or supplemental to the employee's 
income, not to exceed $25 a month. Vendor payments are those 
monetary payments made on behalf of the household by a person 
who is not a member of the household. Vendor payments include 
certain housing assistance but does not include payments for 
medical costs. 

Most of those who regarded vendor and in-kind payments as 
a problem thought that counting such payments as income was 
fair because in many instances the food stamp recipient never 
had access to the payment. Others said they thought the value 
of such payments was difficult to assess. Most suggested that 
vendor and in-kind payments be excluded in determining income 
for food stamp purposes. 

7 . Disaster Expenses 

Presently unusual expenses incurred due to an individual 
household's disaster or casualty losses which could not be 
reasonably anticipated by the household are allowed as disaster 
deductions from income. 

Those who commented on disaster expenses as a problem felt 
that the decisions to allow such expenses were frequently 
arbitrary, that determination of expenses took too long, and 
that recipients were not informed of disaster expense allowances. 
Recommended were more flexibility for determining and verifying 
disaster expenses and clarification of present regulations. 

8 . Child Care 

Child care payments are those payments for the care of a 
child or other persons when necessary for a household member 
to accept or continue employment or training or education which 
is preparatory for employment. These payments are allowed as 
deductions from income. 

Of those commenting on child care expenses as a problem, 
most said the major difficulty lay in complex requirements 
and confusing decisions as to what was allowed as a child care 
expense and what types of receipts were acceptable. 



IV. Identification of Administrative Problems 

Community groups were asked what administrative procedures 
they considered to be major problem areas as administered in 
their localities. Ten procedures were listed and respondents 
were asked to check each one yes, no, or no experience. 
Following are the results of this question. 



338 



12- 



N umber Percent 

1. Outreach 

Yes 163 71 

No 35 15 

No Experience 16 7 

No Response 14 6 

99 

2. Verification 

Yes 150 66 

No 51 22 

No Experience 13 6 

No Response 14 6 

100 

3. Coupon Issuance 

Yes 142 62 

No 59 26 

No Experience 19 8 

No Response 8 4 

100 

4. NPA Recertif ication 

Yes 106 46 

No 52 23 

No Experience 39 17 

No Response 31 14 

100 

5. NPA Certification 

Yes 102 45 

No 58 25 

No Experience 38 17 

No Response 30 13 

Too 

6. Fair Hearings 

Yes 96 42 

No 56 25 

No Experience 62 27 

No Response 14 6 

Wo 

7. PA Certification 

Yes 84 37 

No 74 32 

No Experience 47 21 

No Response 23 10 

100 



339 



-13- 



Number 



Percent 



3 



Retroactive Benefits 



Yes 
No 

No Experience 
No Response 



74 
51 
89 
14 



32 
22 
39 
6 
99 



9. 



Work Registration 



Yes 
No 

No Experience 
No Response 



65 
90 
55 
18 



29 
39 
24 

8 

100 



10. PA Recertif ication 



Yes 
No 

No Experience 
No Response 



60 
87 
50 
31 



26 
38 
22 
14 
100 



1. Outreach 

The Food Stamp Act as amended in 1971 required each State 
Agency to undertake effective action, including the use of 
services provided by other federally funded agencies and organi- 
zations, to inform low-income households concerning the avail- 
ability and benefits of the Food Stamp Program and insure the 
participation of eligible households. 

In late 1974, included in a stipulation and order delivered 
in the Bennett v. Butz Case, which dealt in part with the 
outreach provision, was the statement that "there is no basis 
in voluminous record before this court for any suggestions 
whatever that the defendants undertook and required effective 
action to insure the participation of these eligible poor." 

As a result of the Court decision, in April, 1975, the 
Department issued new regulations requiring the states to 
submit comprehensive outreach plans to the Department of 
Agriculture by July 1, 1975, for approval and to implement 
the Department-approved plans by August 1, 1975. 



340 



-14- 



The majority of respondents said in their areas there was 
either no outreach effort or very little undertaken by the 
local food stamp office. Most of these respondents said 
more needed to be done, and several suggested the food stamp 
offices either contract with local community groups to aid 
in the outreach effort or make use of volunteers from the 
groups. Many also asked that the existing laws be enforced 
and that the local food stamp office be required to undertake 
outreach. 

2 . Verification 

In accordance with Department regulations all income sources 
and mandatory deductions, which include local State or Federal 
income tax, Social Security taxes, mandatory retirement pay- 
ments and mandatory union dues, must be verified. Although 
the regulations do not provide that expenses must be verified 
by receipts, most local food stamp offices do require some 
proof of deductible expenses. 

Many respondents said that too much documentation was 
required for verifications of income and deductions. Some 
said that low-income employed applicants were frequently paid 
in cash and, therefore, did not have pay stubs, making income 
verification difficult. Others mentioned that applicants often 
did not get receipts for bills paid. The other most oft-mentioned 
verification problem was the lack of information applicants 
had about what type of documentation they had to provide the 
food stamp office. Because they were not told what receipts 
were required for the initial certification interview, they 
usually had to return at a later date with their documentation; 
thus increasing the time required to complete the certification 
process. The coordinator of a neighborhood group said "An 
outreach program could explain process of proof needed to 
apply. People generally have to make more than one trip to 
qualify." Suggestions included using a standard or optional 
standard deduction, self -certification (with documentation 
provided after certification) , use of telephone documentation 
by the food stamp worker, and more flexibility on the part 
of the workers in the amount of verification required. 

3 . Coupon Issuance 

After certification, the recipient receives an ATP 
(Author ization-to-Purchase) card. This card enables the 
recipient to purchase food stamps from food stamp issuance 
offices, which can be food stamp offices, banks, credit 
unions, post offices, or other organizations contracted with 
by the States to sell food stamps. 



341 

-15- 



According to respondents, most of the difficulties with 
regard to coupon issuance centered around the lack of actual 
issuance offices (some areas only had one issuance point) , and 
the limited hours many of these offices operated. In some 
localities respondents said issuance offices were open only 
a few days a month for selling food stamps. Several people 
mentioned public assistance checks were frequently mailed at 
a different time of the month than ATP cards, and in some 
localities issuance offices were open only a few days a month 
for selling food stamps. At times, recipients were not able 
to purchase their stamps because by the time they received thei 
ATP card, the issuance centers were closed for the rest of the 
month. 

4 . NPA Recertif ication 

The major problem areas here included complicated and 
confusing food stamp forms, the lack of evening hours for 
working recipients, and short certification periods. In addi- 
tion, a number of people commented on extensive backlogs in 
the food stamp offices, resulting in what was regarded to be 
unacceptable delays in certification for qualified applicants. 
A few respondents said the food stamp office did not notify 
recipients of the need to reapply for food stamp assistance 
at the end of the applicant's certification period. 

Recommended were more trained staff for food stamp offices 
evening hours, and longer certification periods, especially for 
the elderly and those with stable incomes. 

5. NPA Certification 

The problems with this procedure were similar to those 
given for NPA Recertif ication. Most frequently mentioned were 
long delays in the certification process, too few food stamp 
workers, the lack of evening hours for the working poor, and 
complicated and confusing forms and procedures. Suggestions 
included increasing the number of better trained food stamp 
workers, opening the food stamp office some evenings and/or 
Saturdays, and simplifying the forms and procedures. 

6 . Fair Hearings 

Present Department regulations state that each agency 
shall provide any household aggrieved by any action of the 
state agency or state issuing agency a fair hearing before the 



342 

-16- 



agency or with an evidentiary hearing at the local level with 
a right to appeal for an agency hearing. Prompt, definitive, 
and final administrative action must be taken within 60 days 
of the request for a hearing. In addition, the food stamp 
office is required to inform the applicant orally, if practicable, 
of the right to a fair hearing and a statement of this right is 
included on the food stamp application form which the applicant 
must complete and sign. 

Many of the people citing the fair hearing process as a 
problem for applicants and recipients said the food stamp 
office did not inform the applicant or recipient of this right. 
A number of people also said the food stamp workers try to 
discourage the client from pursuing a hearing when the client 
requests one. Respondents asked that the existing fair hearing 
regulations be enforced. 

The 60 days allowed for administrative action in the fair 
hearing process was regarded by many to be too long. The 
staff attorney of a rural legal services organization commented, 
"The sixty day waiting period is absurd. If a mistake is made 
people must go without a nutritionally adequate diet. I see 
no excuse for not requiring a decision within 15 days given 
the severity of the deprivation experienced by a harmed 
applicant. " 

In addition, a few people who had attended fair hearings 
as advocates said they felt the fair hearing officers were 
biased, and they suggested the use of impartial hearing officers. 



7 . Public Assistance Certification 

According to Department requirements public assistance 

recipients are automatically eligible for food stamp benefits, 

and when they apply for public assistance they are to be given 

an affidavit informing them of this fact. They then may apply 
for food stamps if they wish. 

Many respondents said public assistance recipients were 
not given the affidavit or informed of their automatic eligi- 
bility. These people asked that the current regulations be 
enforced. Other problems cited were long and complicated 
forms and long waiting periods for completion of the certifi- 
cation process. A county coordinator of a CAP agency commented 
that "the purchase price is based on a public assistance grant 
which takes 4 5-60 days to process. The result is the family 
has an ATP (Authorization-to-Purchase) card for food stamps 
with no money to purchase stamps." Recommended was coordina- 
tion of welfare and food stamp procedures, and simplification 
of forms and procedures. 



343 

-li- 



"8 . Retroactive Benefits 

Under present Department regulations benefits lost by the 
:ood stamp recipient because of State administrative errors must 
able, )e repaid retroactively through appropriate downward adjustments 
.n future purchase prices. 

Many of those who commented on this benefit said it was 
lifficult to obtain retroactive benefits because, like the 
lair hearing process, food stamp recipients were not informed 
)f their right to apply for these benefits. An information 
:oordinator for a citizen's coalition on hunger said "Retro- 
ictive benefits are awarded only grudgingly and if there is 
some insistence on the part of recipients or, more likely, 
" 5 jome advocate for the recipient who understands the regulations." 

Long waits to receive retroactive benefits was another 
problem cited by a number of respondents. A legal assistant 

■ d ' ilth a legal aid bureau commented that "the process of authorizing 
■ enefits takes two months to put into effect, prolonging the 
lardship that already exists." 

Respondents asked for clear guidelines and for enforcement 
f current regulations. 



Work Registration 

Currently food stamp regulations require that able-bodied 
ersons between the ages of 18 and 65 (with certain exceptions) 
ho are not employed at least 30 hours a week or attending 
chool at least half of the time must register for and accept 
ui table employment. The recipient registers for work at the 
ood stamp office, and the registration is forwarded to the 
ocal employment service office. Those registered must cooperate 
rith the Employment Service, and the Employment Service, in 
;urn, must report to the food stamp office regarding any 
iction taken, such as employment secured or refused by the 
ecipient. There are certain standards of suitability, 
.ncluding payment of the minimum wage, which must be met 
i>y any job offered to the recipient. Refusal to register 
:or work or to accept suitable employment renders the house- 
lold ineligible for food stamps for one year. 

Of those who commented on the work registration require- 
ment, several said that they viewed it as ineffective since 
:here were no jobs available. The Director of a Community 
iction Agency Food and Nutrition group said "In my opinion, 
:his is a token procedure, because a good percentage of the 
:ime the Employment Service Office is unable to find jobs." 



344 



-18- 



Others felt that food stamp recipients over age 50 or 
60 should not have to register for work. Additional problem 
mentioned were long commuting distances, particularly in 
rural areas, to employment offices and confusing rules which 
needed clarification. 



10 . Public Assistance Recertif ication 

Often mentioned as a problem for this group were too frequen 
recertif ications . Respondents felt that certification periods 
for public assistance recipients should be for 6-12 month periods. 
Also cited was the lack of coordination between the public 
assistance redetermination dates and food stamp recertif ication 
dates. Many respondents recommended that redetermination and 
recertif ication take place at the same time. 



V. The Variable Purchase Option 

The Variable Purchase Option permits households to 
purchase three-quarters, one-half, or one-quarter of their 
total monthly coupon allotment. The community groups were 
asked if the offer of the VPO should be mandatory, State 
option, or prohibited. The responses to this question are 
shown below. 





Number 


Percent 


Mandatory 


193 


85 


State Option 


4 


2 


Prohibited 


5 


2 


No Response 


26 


11 



The overwhelming majority of community groups said the 
States should be required to offer the variable purchase option. 
A typical comment, made by a legal services group representative, 
was, "There are times and situations when Food Stamp households 
cannot find the amount of money needed to purchase a month 1 s 
supply of food stamps all at one time. All people have ongoing 
expenses, and it is unrealistic to think that anyone can afford 



345 

-19- 



to spend 20-30 percent of their income on anything, all at 
once, and especially at the beginning of the month when a 
lot of bills come due." A few respondents commented that 
some recipients don't need a full allotment since they eat 
their major meal at a nutrition center, and that others, 
such as some vegetarians or people who buy natural foods, 
also might not need their full allotment. 

Many respondents were concerned that if given the choice, 
the States would not offer the VPO. A casework supervisor 
of a public welfare coalition group stated: "This is usually 
decided not in favor of the client, but what will make the 
easiest bookkeeping for the State. Obviously a fixed purchase 
based on family size, regardless of whether or not they will 
use them will be the policy. Service to the recipient should 
be the determining factor." 

Those who felt that the VPO should be either a State 
option or should be prohibited said people tend to skip on 
food that is vitally needed; and that the money should all 
be spent on food. 



VI . Special Groups 

The local community organizations were asked which groups 
in their area had special problems in applying for and being 
certified for food stamps. Ten groups were listed and respon- 
dents were asked to check each one yes, no, or no experience. 

The four groups identified most frequently as having 
special problems were the elderly, the disabled, the low-income 
employed and the unemployed. The table below indicates the 
responses for all ten groups. 



346 



-20- 



N>Hj.n'i Percent 

1. Elderly 

Yes 183 80% 

No 25 11 

No Experience 15 7 

No Response 5 2 



Nmfcer 



Percent 



fc. Migrant Farmworkers 

Yes 65 29% 

No 28 12 

No Experience 120 53 
No Response 15 7 



4 . 



Disabled 






7. Strikers 






Yes 


164 


72% 


Yes 


43 


19% 


No 


41 


18 


No 


43 


19 


No Experience 


20 


9 


No Experience 


131 


57 


No Response 


3 


1 


No Response 


11 


5 








8. Aliens 






Low- Income Unemployed 








Yes 


148 


65% 


Yes 


44 


19% 


No 


46 


20 


No 


35 


15 


No Experience 


24 


11 


No Experience 


146 


64 


No Response 


10 


4 


No Response 


3 


1 


Unemployed 






9. Indians 














Yes 


128 


56% 


Yes 


23 


10% 


No 


68 


30 


No 


32 


14 


No Experience 


23 


10 


No Experience 


159 


70 


No Response 


9 


4 


No Response 


14 


6 



5. Students 

Yes 67 29% 

No 53 23 

No Experience 98 43 

No Response 10 4 



10. 



Military 
Yes 
No 

No Experience 
No Response 



15 
34 
162 
17 



7 
15 
71 

7 



1. Elderly 

Three major areas were cited most often as causing problems for 
this group. One, lack of transportation, was perceived to be a 
major obstacle limiting participation. The point was frequently 
made that in rural and suburban areas mass transportation was non- 
existent, while in urban areas, it was expensive, inconvenient, 
and sometimes dangerous. Thus, the elderly either had to rely on 
volunteer organizations or had to hire someone to drive them to the 
Food Stamp office. The solutions most usually offered were home 
visits by certification workers and the use of authorized repre- 
sentatives. 



Second, the welfare stigma attached to food stamp recipients 
was also considered by many to deter participation by the elderly. 
The director of a Senior Citizens Center said "The elderly are very 
proud of their contributions to the American Way. They don't want 
to stand now in 'welfare lines' even though they desperately need 
the extra food." Many of those who considered this a problem sugg- 
ested that the food stamp office be located someplace other 




347 



-21- 



than in the local welfare office. 

Third, the long, complicated forms, were regarded to be 
particularly difficult for the elderly to understand. Numerous 
respondents recommended simplified forms and procedures . Other 
factors mentioned as limiting participation were long waits for 
appointments and interviews, the small bonus many elderly house- 
holds receive, ineffective or nonexistent outreach for this group, 
and restrictive resource and asset limitations. 

2. Disabled 

Respondents considered transportation to be a major obstacle 
limiting participation by the disabled. Recommendations for 
solving this problem included abolishing the requirement for face- 
to-face interviews and providing funds for additional workers to 
be hired to make home visits. 

The long waits in food stamp offices were seen as a deterrant 
to participation because of the physical impairments most disabled 
have. Two other related problems were one, physical barriers such 
as crowded conditions and the lack of elevators to food stamp 
offices not located on the ground floor, and two, complicated forms 
and procedures, which were particularly difficult for those with 
mental disabilities to comprehend. Recommendations included pre- 
liminary application procedures be made by mail or telephone, 
convenient satellite certification offices be established, home 
visits be made by certification workers, and, outreach workers 
be provided to fill out applications in the applicant's home. 

3 . Low- Income Employed 

The most frequently cited problem for this group among those 
who commented was inconvenient hours of operation for the food 
stamp office. Respondents said applicants either lost food stamp 
benefits or hours on the job because the food stamp office was only 
open during weekdays. Recommended solutions included evening and 
weekend service by the food stamp office and use of mail applications. 

Verification of income and expenses were cited as problems by 
an equal number of people. According to respondents, verification 
of expenses caused difficulties because frequently low-income 
employed households do not obtain receipts for services and do not 
have bank accounts. In addition, problems arose in verifying income 
because many receive their wages in cash and therefore do not have 
pay stubs. Some people recommended using a standard deduction, 
while others suggested an optional standard deduction to eliminate 
the need for verification of expenses. Still others thought there 
should be more flexibility in program rules governing the need for 
receipts . 



75-QfiQ O - 7fi . 71 



348 

-22- 



The inability of low-income households to accumulate enough cash 
to buy into the program was another obstacle mentioned by many 
respondents. Elimination of the purchase price was the solution 
most offered. Untrained food stamp workers, the welfare stigma, 
small bonus amounts, and long lines were additional factors given 
as limiting participation. 

4 . Unemployed 

A frequently mentioned problem for this group was the delay 
in receipt of food stamp benefits because the applicant had not 
received confirmation of unemployment benefits. Tied to this was 
the inability of the unemployed to accumulate the necessary cash 
to purchase the stamps. Recommended solutions were elimination 
of the purchase price and more frequent use of emergency or zero 
purchase price issuance. 

Also ineffective or nonexistent outreach, assets that cannot 
be disposed of easily, and long lines were cited as problems 
effecting this group. 

5 . Students 

The negative attitude of food stamp workers as well as the 
public toward student participation was seen as the main deterrant. 
Other problems cited were delays in certification caused by the 
tax dependency requirement, and the difficulties in determining 
household status. 

As the responses to this question show, over 50% of the 
respondents did not have experience with migrant farm workers, 
aliens, strikers, Indians, and the military. 

6 . Migrant Farmworkers 

Of those who had experience with this group, a large majority 
said migrant farmworkers experienced problems in applying for and 
being certified for food stamps. 

Those who commented regarded the language barrier and the lack of 
bilingual personnel in food stamp offices to be a major obstacle 
limiting migrant participation. Most recommended that the food stamp 
office hire bilingual personnel and establish a working relationship 
with migrant interest groups. 

Another problem frequently cited for this group was the 
difficulty in verifying their income and their addresses. A 
services coordinator for a farm migrant program said, "Seasonal 
farm migrant clients are not people who keep records and many times 
can't get work records as they had worked for cash. They are 
mainly nonresidents of the county or State and go hungry while the 
paperwork is being processed and the information is gathered." 



349 



-23- 



Other problems mentioned as being encountered by migrant 
farmworkers were their inability to meet the pruchase price, lack 
of emergency- certification procedures, and inadequate transportation 
facilities, A project coordinator in nutrition recommended that 
"since the migrant stream comes at specific times of the year, 
local food stamp offices could ease the certification, recertif ication 
prdcess by advance planning. Migrants continue to be an invisible 
section of the community to assistance agencies." 

7 . Aliens 

Respondents who had experience with this group found that the 
language barrier and the lack of bilingual personnel in the food stamp 
office deterred participation. Since aliens were unable to commun- 
icate, they could not understand the forms and procedures. Many 
people suggested the food stamp office hire bilingual personnel 
and have forms available in foreign languages. A director of a 
welfare rights organization said, "All (ethnic) groups should be 
represented by food stamp workers. Even the uneducated or under- 
educated. Workers tend to forget that all people may not 
understand the terms, words and general explanations that are 
used. Those who do not understand and thus misuse the program or 
the program misuses them, are sometimes charged with fraud. Many 
pretend to understand when they actually do not." 

8. Strikers 

Community groups who had worked with strikers said the main 
problem was the negative attitude of food stamp workers and the 
general public which deterred participation. Some people mentioned 
it was frequently difficult to verify a striker's income. Others 
said that there was a lack of effective outreach directed at this 
group. 

9. Indians 

Cultural barriers, the welfare stigma, transportation, and 
the lack of effective otureach were obstacles viewed as limiting 
participation among eligible Indians by those who had experience 
with this group. 

It was recommended that outreach workers familiar with the 
culture visit the Indian communities to assist in certification. 

10. Military 

Only two people commented on the military. They both said a 
problem existed for the military because of the fact that eligibility 
was based on total family income; however, since the serviceman did 
not always send his wife her allotment, she did not have access 
to the family's total income. They recommended eligibility be 
based on the wife's actual proven income. 



350 

-24- 



VII . Application Problems 

The local groups were asked which problems, if any, people 
had in applying for food stamps in their areas. Nine areas 
were listed and respondents were asked to check each one yes or no. 
The table below shows the responses to this question. 



Transportation to 
Food Stamp Offices 

Yes 

No 

No 



Number 



187 
30 
11 



Percent 



82% 
13% 
5% 



Number Percent 



Long Wait for 
Appointments 
Yes 
No 
No 



152 
61 
15 



67% 
27% 
7% 



2. Inadequate Number of 
Certification Centers 

Yes 174 
No 44 
No Response 10 



76% 
19% 
4% 



6. Long Lines 
Yes 
No 
NO 



149 
62 
17 



65% 
27% 
7% 



3. Insufficient Staffing 

Yes 169 
No 36 
No Response 23 



Inconvenient Hours 
of Operation 

Yes 

No 

NO 



161 
59 



74% 
16% 
10% 



71% 
26% 
4% 



7. Rude Behavior 

Yes 148 
No 61 
No Response 19 

8. Eligibility Workers 
have Insufficient 
Training 

Yes 120 
No 85 
No Response 23 

9. No Bilingual Personnel 

Yes 70 
No 114 
No Response 44 



65% 
27% 



53% 
37% 
1% 



31% 
50% 
19% 



1 . Transportation 

Transportation problems varied according to geographic area. 
That is, in urban areas the most frequently mentioned obstacles to 
participation were no parking, particularly in downtown areas; and 
mass transportation, which many regarded as unreliable or expensive. 
In rural locations the primary concerns were lack of public trans- 
portation and long driving distances. (One group mentioned that 
some applicants had to travel 40 miles to the nearest food stamp office. 
Recommendations for both urban and rural areas included providing 



351 



-25- 



mobile and satellite centers, using the mails, using authorized 
representatives, and reimbursing clients for travel costs. 

2 , 3 , and 4 . Inadequate Number of Food Stamp Centers, Long Waits 
For Appointments, and Inadequate Staffing 

These three problems were considered to be directly related 
to one another. Many respondents said that the long waits for 
appointments were a result of insufficient staffing and an inadequate 
number of food stamp offices. It should be noted that some respond- 
ents said their local food stamp office did not make appointments. 
Thus, applicants had to line up at the office at 5 or 6 a.m., and/or 
had to return another day to try again. 

One respondent said that last year there were nine eligibility 
workers in his local food stamp office and presently there are two. 
His organization handles one out of three cases because the food 
stamp office has such a backlog. 

Recommendations for solving these three problems included: 
providing satellite and mobile units; setting minimum standards for 
adequate staffing; allowing outreach workers to participate in 
the actual certification, waiving the requirement for face-to-face 
interviews, and allowing for transfer of staff within a State to 
areas of need for the duration of that need. 

5. Inconvenient Hours of Operation 

Many groups reported that food stamp offices had no weekend or 
evening hours, making it particularly difficult for the low-income 
employed to apply and to be recertified once they were accepted into 
the program. 

An additional problem mentioned by some was that the food stamp 
office closed for the lunch hour. The suggestion here was to 
stagger lunch hours. 

In addition/ inconvenient hours of operation were regarded 
as one of the factors causing long lines. One person suggested a 
24-hour food stamp assistance program be initiated, depending on 
the percentage of eligibles and recipients. He, as well as many 
others, suggested the food stamp office make use of community group 
personnel. 

6. Long Lines 

Many groups said long lines were a result of insufficient 
staffing, inadequate number of offices, and inconvenient hours or 
operation. 

Recommendations included providing satellite and mobile offices, 



352 



-26- 



using community group workers to assist in certification, and 
hiring more trained staff. 

7 . Rude Behavior 

Respondents had two views on this problem. There were those 
who said such behavior by food stamp workers stemmed from an 
"incredible caseload." This problem was described by one person 
as being "in part a function of poor training, in part a function 
of high caseloads for too few staff." Onec again, most people 
suggested hiring more adequately trained staff. Other saw rude 
behavior as negative or racist attitudes against the poor and minor- 
ities. One person suggested that food stamp workers be closely 
screened before employment for attitudes that might hinder 
services. Many suggested workers receive sensitivity training 
so they would be better able to understand the problems of the poor. 
Others recommended that minorities and the poor be hired and 
trained to work in food stamp offices. 

8 . Eligibility Workers have Insufficient Training 

This problem was usually considered to be a result of the 
heavy caseloads food stamp offices have. One respondent said he 
was told by a food stamp supervisor that in his office "a training 
class was never completed because of emergencies." Another person 
said that "training is short, many times our agency learns about 
new policies before the workers do." 

In-depth training was the recommended solution. 

9. No Bilingual Personnel 

Those who viewed this as a problem were generally from large 
metropolitan areas or from agricultural areas with migrant farm 
worker populations. 

Recommended solutions were for food stamp offices to hire 
bilingual personnel and/or to make use of such personnel which 
could be provided by community groups. 

VIII. Issuance Problems 

Presently food stamps are issued through the local welfare 
office or through an issuance agency such as a bank or a credit union 
which has a contract with the local welfare office. 

Community groups were asked what problems food stamp 
recipients had in purchasing food stamps at issuance centers. Seven 
areas were listed and respondents were asked to check each one yes 
or no. Following are the responses to this question. 



353 



•27- 



1. Inconvenient Hours 
of Operation 

Yes 149 65% 

No 55 24% 

No Response 24 11% 



No Bilingual 
Personnel 

Yes 

NO 

No 



52 
125 
51 



23% 
55% 
22% 



2. 



Inconvenient 
Locations 

Yes 

No 

No Response 



124 
74 

30 



54% 

32% 
13% 



No Changemaking 
Yes 
No 
No 



36 16% 
130 57% 
62 27% 



3. Long Lines 
Yes 
No 

No Response 



4. Rude Behavior 
Yes 
No 
NO 



7. 



118 
77 
33 



52% 
34% 
14% 



92 40% 
101 44% 
35 15% 



Issuance Centers 
Withdraw Service 
when Caseload Heavy 

Yes 29 
No 132 
No Response 67 



13% 
58% 
29% 



1 , 2 , and 3 . Inconvenient Hours of Operation, Inconvenient 
Locations/ and Long Lines 

A majority of respondents cited three main problem areas — 
inconvenient hours of operation, long lines, and too few issuance 
offices. Most suggested not only longer hours but also Saturday 
issuance for working recipients. Also recommended were more 
issuance offices to reduce travel time and long lines. In addition, 
many people asked for mail issuance, which presently can be instituted 
at the option of the State. 

4 . Rude Behavior 



Almost half of those who responded said rude behavior on the 
part of issuing agency personnel was a problem. Many groups 
suggested issuance agents offer human relations training, hire 
workers from low-income groups, and provide better supervision 
of their employees. 

5. No Bilingual Personnel 

Those who regarded the lack of bilingual personnel as a 
problem recommended issuance offices hire bilingual staff. 

6 . No Changemaking 

It was apparent from the explanations of the difficulties 
caused by no changemaking that this question was misunderstood. 
The intent of this inquiry was to determine whether issuance 
offices required recipients to have the exact purchase price in order 
to buy their food stamps. Most who commented interpreted the 



354 



-28- 



question as referring to the USDA regulation prohibiting grocery 
stores from giving food stamp users change. Many suggested that 
grocers be permitted to give change rather than credit slips. 

7 . Issuance Centers Withdraw Service when Caseload Heavy 

Suggestions to reduce the impact of issuance cetners withdrawing 
their service when the food stamp caseload increased included 
using mail issuance and establishing more issuing offices. 

IX. Outreach Experience and Techniques 

In order to ascertain what experience community groups had with 
food stamp outreach, the groups were asked to briefly describe how 
they became involved in outreach efforts. 

Of the 228 questionnaires returned, 46 did not respond to 
this question, 11 groups said they did not do any outreach (two 
of these commented that they were advocates trying to get the 
State to observe the food stamp regulations pertaining to out- 
reach) and 4 said they had been requested by their local Department 
of Social Services to do outreach. 

Of the remaining 167, a little more than half were groups 
who either were advocates aiding potential eligibles to gain 
entrance to government funded programs designed to help them, or 
were organizaitons providing such services as emergency food assist- 
ance, health care, and information or nutrition education. 
These outreach efforts seemed to take the direction of informing 
people of the availability of the food stamp program when the client 
approached the organization for aid with other basic needs. In 
addition, a few said they became involved when the transfer began 
in their community from food commodity distribution to food stamps - 
and a number mentioned that funding they received under Emergency 
Food and Medical Service grants allowed them to assist applicants 
with the food stamp purchase price and their outreach efforts derived 
from this service. 

An Executive Director of a Community Action Council said, 
"As part of our overall community organization work, our resi- 
dent workers inform potential recipients about the Food Stamp 
program and assist them in applying for stamps. The acting 
director of a legal assistance group said in her state her 
organization "monitors the food stamp program as part of a 
program to ensure that residents have access to all nutrition 
programs available. " The field director of a Christian Family 
Service organization commented, "We are serving handicapped 
people and their families. Most of these are very indigent. Food 
is a major item;" and a representative of a poverty rights office 
said, "We are an advocacy office dealing with problems of 
poor people. Hunger is, therefore, one of our main concerns. We 



355 



-29- 



have been involved with food stamps since the inception of the 
program. " 

The remaining groups said that they became involved in 
outreach because they felt there was a need for it in their 
communities. Generally these respondents had organized or were 
in the process of organizing outreach campaigns in their local 
areas . 

The director of a community ministry volunteer program 
commented that "people unable to get appointments for interviews 
ran out of food and turned to churches. Since the churches were 
unable to provide food on a continuing basis, we decided to help 
make the process more efficient. We preferred to work with the 
existing government programs to get people their stamps." A 
committee member of a county assistance program said, "Hunger is a 
very definite problem in our county. People come to our doors with 
complaints of no food, of no money to get food stamps and when these 
families were investigated, the complaints were substantiated. 
When no amount of explanation to the food stamp office would suffice 
we started looking more deeply into the food stamp area and found 
many areas that need changing." The staff attorney of a legal ser- 
vices group said, "We train people in the fooO. stamp program and 
give advice on how to do local outreach campaigns because the 
State is failing its responsibility." 

In a related question, groups were asked if they were 
familiar with several outreach techniques and if they judged these 
techniques to be effective or ineffective. 

There were six techniques listed: (1) information distributed 
at grocers; (2) information distributed to community groups; (3) door 
to-door campaigns; (4) press releases; (5) TV and/or radio spots; 
(6) telephone campaigns (hot line) . Respondents were asked to 
check each technique yes, no, or no experience. 

Table I is a summary of the responses of all community groups 
to this Outreach question, while Table II, relating to effective- 
ness and ineffectiveness, is a summary of responses from those 
having experience with the six outreach techniques. 

Most respondents were familiar with three outreach techniques — 
information distributed to community groups, press releases, and 
television and radio spots. Fewer had experience with information 
distributed at grocers, door-to-door campaigns and telephone hot 
lines . 

Those who had experience with information distributed to 
community groups thought it was most effective. A coordinator of 
a food stamp outreach program said this technique was effective 
"if not simply a matter of distributing pamphlets. We mean here 
informational meetings where someone with good acquaintance with the 
program can answer questions." 



356 



-30- 



Groups who were familiar with press releases as an outreach 
technique were evenly divided as to whether this was effective. 
Some felt that the releases contained superficial information and 
often caused confusion. A few people mentioned it was ineffective 
because the poor frequently could not afford newspapers. Some 
also said illiteracy among the needy was a problem. 

Community groups had less experience with door-to-door 
campaigns and telephone hot lines. Those who did have such 
experience rated these techniques very effective. A food stamp 
coordinator in a community action agency said of door-to-door 
campaigns, "They are extremely effective in low-income areas. 
It is, in fact, just about the only truly effective means of 
outreach in the intense poverty pockets." With respect to 
telephone hot lines, the coordinating center director of a 
community volunteer program commented that "hot lines do encourage 
people to apply. However, hotlines must be linked with an organ- 
ization which will actually make the appointment, which actually 
provides the services offered." 

Television and radio spots were considered to be highly effective 
also. Those who had experience with the technique generally felt 
that if the information persented was thoroughly explained, it 
reached many who were potentially eligible. 

Information distributed at grocers was not considered to be 
especially effective. It should be noted that a large number of 
groups did not have experience with this technique. 



357 



-31- 

OUTREACH , TABLE I 
SUMMARY OF RESPONSES 



Number 



Percent 



Information Distributed at 
Grocers 

Effective 

Ineffective 

No Experience 

No Response 



57 
52 
92 
27 



Information Distributed by Community Groups 
Effective 140 
Ineffective 33 
No Experience 29 
No Response 26 



3. Door-to-door Campaigns 

Effective 
Ineffective 
No Experience 
No Response 

4. Press Releases 

Effective 
Ineffective 
No Experience 
No Response 

5. TV or Radio Spots 

Effective 
Ineffective 
No Experience 
No Response 

6. Telephone Campaigns 

Effective 
Ineffective 
No Experience 
No Response 



68 
28 
96 
36 



82 
63 
45 
38 



96 
39 
57 
36 



47 
26 
120 

35 



25% 
23% 
40% 
12% 



61% 
14% 
13% 
11% 



30% 
12% 
42% 
16% 



36% 
28% 
20% 
17% 



42% 
17% 
25% 
16% 



21% 
11% 
53% 
15% 



358 



32- 



OUTREACH, TABLE II 
EFFECTIVENESS 

Number 



Percent 



1. Information Distributed to 
Community Groups 

Effective 
Ineffective 

2. TV and Radio Spots 

Effective 
Ineffective 

3. Door-to-Door Campaigns 

Effective 
Ineffective 

4. Telephone Hotline 

Effective 
Ineffective 

5. Press Releases 



140 

33 
173 



96 
39 



68 
28 
96 



47 
26 
7 



81% 
19% 



71% 
29% 



71% 
29% 



64% 
36% 



6. 



Effective 
Ineffective 

Information Distributed 
at Grocers 



82 
63 

US 



57% 
43% 



Effective 
Ineffective 



57 
52 
109 



52% 
48% 



359 



-33- 

Most Serious Problems 



Community groups were asked to identify up to five of what 
they considered to be the most serious problems in the food stamp 
program, to list them in order from most to less serious, and to 
briefly elaborate on the specified problem. 

The response rate to this question was very high: 89% of 
questionnaire respondents listed at least one most serious problem. 

The community workers' responses were analyzed and categorized 
as to the area of concern and the type of problem associated with 
it. The following ranking was then obtained by assigning a weighted 
value to the number of times a problem was mentioned at each of 
the five levels. In brackets are the total number of times each 
problem was indicated, regardless of ordinal level. 



1. Purchase requirement: clients unable to afford/hinders parti- 
cipation too high for some. [76] . 

2. Outreach: inadequate or nonexistent/potential eligibles remain 
uninformed. [60] . 

3. Certification complexity: too much red-tape in the process/ 
forms and program requirements too complicated/burdensome and 
time-consuming for applicants. [56] 

4. Eligibility Workers: rude and insensitive toward recipients/ 
insufficient training and inadequate familiarization with 
program regulations. [64] 

5. Certification delays: long waiting period between initial 
contact (or application) and being certified (or receiving 
authorization to purchase stamps) /long lines. [44] 

6. Transportation: unavailable or difficult for many households/ 
limits access to certification and/or issuance centers. [44] 

7. Lack of staff: insufficient staffing levels to keep up with 
caseload and complex program requirements. [38] 

8. Access to Certification offices: insufficient number of 
offices/ inconvenient locations/ limited hours of operation. [40] 

9. Coupon allotment: inadequate nutritionally/insufficient 
purchasing power for the entire month. [36] 

10. Elderly: special problems such as mobility/tend to benefit 
least from the program as currently structured. [28] 



360 



-34- 



The most serious problems as viewed by community groups 
reflect their concern with the difficulties confronted by 
needy households in gaining access to food stamp services and benefits 
Households (some or most) were perceived as having difficulties in 
getting to the certification and issuance centers [problems 6, 8], 
in negotiating the complex certification process with its delays 
red-tape, and unhelpful eligibility workers [3,4,5], and in paying 
for the stamps to which they are entitled [1]. Other potential 
eligibles were said to lack access to the program due to lack of 
outreach [2] , and the elderly were said to experience special dif- 
ficulties in gaining access to program benefits [10]. In addition, 
the coupon allotments were said to be inadequate in providing access 
to a nutritionally adequate diet [9] . 

Some elaboration follows on the ten most serious problems 
listed. It should be noted that "community groups" as used here means 
"community groups who described this aspect of the program as a 
major problem." 

Purchase Requirement -- Community groups incidated that some 
or many low-income households were unable to afford the purchase 
requirement -- i.e., were unable to pay for their food stamps. 
Some respondents emphasized that their clients could afford part, 
but not all, of their full allotment, or that recipients may not 
be able to meet the purchase price during months of special 
financial stress. Said a child nutrition project coordinator: 
" [The] purchase requirement constitutes a barrier to participation 
both without and within the program. Provision for variable 
purchase and semi-monthly issuance both testify to the difficulties 
created by this requirement, as does the drop-off in every State 
between the number of ATP's issued and the number cashed." 
Said a family service consultant: "People with low incomes often 
have financial crises. It is inhumane to deny them the bonus 
because of their inability to pay the purchase requirement. Also 
this is an unnecessary addition to administrative expenses." 
Commented a Manpower program worker: "The purchase price is so 
high for many of the working poor that it is not worth the loss of 
self-respect, time, and hassle to receive [food stamps]." 

Outreach — Inadequate or nonexistent outreach efforts were 
cited by community groups. A number of potential eligibles were said 
to remain uninformed about the program as a result. The director 
of a community action agency claimed: "At present the only active 
outreach in [our city] is being conducted by community based agencies. 
A community action council coordinator urged: "In a land of abundance 
people should not go hungry, and if there is a Federal program 
to help people with food purchases, every opportunity should be 
taken to tell people about the program." The acting director or 
a legal assistance project said that his State "has defied Federal 
regulations since August, 1975, by allowing the outreach coordinator 
position to go unfilled." 



361 



-35- 



Certif ication Complexity — Community groups criticized 
certification "red-tape," citing complex and time-consuming 
forms and procedures , burdensome verification requirements, 
and multiple visits to the certification office. An attorney 
with a legal services food and nutrition project said: "Too 
much red tape in the application process discourages eligible 
households from applying. Verification procedures should be 
simplified." Stated a legal task force director: "In its 
attempt to make eligible only those persons who are genuinely 
needy, the Department* of Agriculture, in writing its regulations, 
has made the program so complex that few persons understand it." 

Eligibility Workers — Insufficient training, inadequate 
familiarization with program regulations, and rude behavior 
toward recipients on the part of eligibility workers was cited. 
A worker in a poverty rights office charged: "Clients are 
denied or pay too much money for stamps because of worker's lack 
of concern, attention, or training." Stated the director of a 
community ministry program: "Certifiers who treat people in an 
uncaring manner are a most serious problem. Often rudeness 
becomes an attitude which is reflected in the first question. 
Some certifiers do not tell the applicant all the available 
information, or why it is necessary to ask certain questions." 

Certification Delays — Referred to here were all the delays 
which may occur in the process of applying for food stamps. 
Cited were long lines at the certification office, long waits 
for the initial interview, and the total length of time it takes 
from the initial contact or application to being certified or 
receiving the authorization to purchase card. Some commented that 
the currently allowed 30-day processing time is too long, while 
some others indicated that in their locality, processing took 
longer than 30 days. A community council director listed the 
"waiting period for the client in the district [food stamp] office" 
and explained "The reason we rated this number one is the feedback 
we get from the client when they come to us." Said a nutrition 
task force director: "Food stamp applicants walk into the door 
of the food stamp office when they need food stamps, not 30 days 
before they need them." 

Transportation -- Community groups indicated that inadequate 
transportation to certification and/or issuance centers caused 
hardships and made difficult access to needed food stamp services. 
Some cited outlying (suburban or rural) areas in particular. 
Typical was this comment from a county opportunity council coor- 
dinator: "60% of the population lives outside the city where 
the Welfare Office is located. No public transportation from 
rural to city area. Large elderly population without private 
transportation. " 



362 

-36- 



Lack of Staff — Insufficient staffing levels to keep up 
with the caseload and to cope with complex program requirements 
were frequently mentioned. Some implicated staff shortages in 
other program failings. Said one community group supervisor: 
"The [State] department does not provide adequate personnel to 
conduct the food stamp program in a humane and effective manner. 
This appears to be a matter of policy determination and setting 
of improper priorities." 

Access to Certification Offices -- Community groups spoke to 
a need for more local certification offices, including mobile 
or satellite units if necessary, and for more flexible hours of 
operation — specifically evenings and weekend hours. Respond- 
ents related the problem of access to food stamp offices to 
transportation problems, to the problems of rural recipients, and 
to the problems of the elderly and the working poor. (Difficulties 
in access to issuance offices, due to inadequate locations and limited 
hours of operation, were also mentioned by a number of community 
respondents . ) 

Coupon Allotment — Present coupon allotment levels were 
criticized as inadequate nutritionally. Respondents discussed 
their dissatisfaction with regard to the purchasing power 
provided by the monthly allotments and with regard to the thrifty 
food plan upon which it is based. Some cited those with special 
medical and dietary needs as inadequately served. The director 
of an agency on the aging said: "The economy food plan is extremely 
low. The thrifty food plan certainly isn't any better .... the 
higher cost of diabetic food needs to be taken into consideration." 

Elderly — Myriad problems faced especially by low- income 
elderly households were cited. Most frequently mentioned was 
their difficulty in getting to the food stamp office, particularly 
when multiple visits were required. Others pointed to the restricting 
effect of income and assets standards on participation by the 
elderly, which were said to result in too high a purchase price 
and too low a bonus for them. This group's disdain of the "welfare 
stigma" was also seen as limiting their participation. A community 
resource coordinator recommended: "The net food stamp income level 
should be raised for those senior citizens on a fixed income. This 
is the class of people who need the most help and benefit the least 
from the program. " 



363 

-37- 



XI . Most Satisfactory Aspects 

Similar to the previous question, community groups were 
asked to identify up to five most satisfactory aspects of 
the program. The response rate to this question was lower than 
that to the previous question, indicating that community workers 
more readily identified serious problems than satisfactory aspects 
of the program. At least one satisfactory aspect of the program 
was listed by 68% of the respondents. 

Responses were analyzed, weighted, and ranked in the same 
manner as the previous question. As can be noted from the 
bracketed figures, many of even these most frequently mentioned 
satisfactory aspects were mentioned by only a small number of 
community workers. 



1. Food and Nutrition Benefits: better food selection, better 
diet, better nutrition/increased food purchasing power/stamps 
used only for food. [101] 

2. Aid to non-public assistance households, the working poor, 
those temporarily in need, and the recently unemployed. [24] 

3. General Federal Policy: original legislative intent and 
nationwide implementation with national standards. [21] 

4. Itemized Deductions: best reflect household's financial 
situation. [19] 

5. Better than Commodities: more freedom of selection and 
more satisfactory for recipients. [17] 

6. Economic and Agricultural Benefits: stimulates local economy/ 
increased domestic consumption of food products. [23] 

7. Emergency (Zero Purchase) Certification: important service 
to needy households. [15] 

8. Outreach: working well, or mandated expansion commencing. [18] 

9. Basis of Issuance Standards: benefits relative to household 
size and income/equitable. [12] 

10. Retailers: many stores readily accept stamps. [13] 

The most satisfactory aspects of the program as viewed by 
community groups concern the benefits provided to recipients and 
the social policy implicit in or attributed to the program. The 
first, second, third, fifth, and sixth most frequently mentioned 



75-969 O - 76 - 24 



364 



38 



satisfactory aspects are of this type. Respondents felt that 
despite the many problems with the program, aid was being 
provided to at least assist needy households in obtaining 
a nutritionally adequate diet. 

A not infrequent response to this question was a general 
remark along the lines of "At least the program exists" or 
"It's better than nothing," indicating a rather begrudged 
satisfaction with the program. One respondent, the president 
of a welfare rights organization, explained his reluctance to 
answer this question by stating: "If we could find five 
satisfactory aspects about the program, we would not have filed 
suit." But another perspective was given by a Vista supervisor 
who observed that at his community action agency, "we do not hear 
the good things. It is when participants have problems that they 
come to us for assistance. If and when things go well, we are 
never contacted." 

Some elaboration follows on the ten most satisfactory aspects 
listed. It should be noted that "community groups" as used here 
means "community groups who described this aspect of the program 
as satisfactory." 

Food and Nutrition Benefits — Mentioned by nearly two- 
thirds of those who responded to this question, the food and 
nutrition benefits provided to recipients by the Food Stamp 
program was viewed as its most satisfactory aspect. Community 
groups observed that recipients obtain a more varied food 
selection, a more adequate diet, and better nutrition with food 
stamp assistance. Some spoke in terms of increased food purchasing 
power, and some referred specifically to the fact that stamps 
can only be used to purchase food. Typical were these comments: 
"Provides 'bonus' amount of money for food use, and therefore 
increases the spending power of the poor. Money cannot be used for 
non-edibles, which is good." "This has been the only resource many 
persons have had to be able to eke out unemployment benefits and 
to continue feeding their families." "More food-better food-better 
health." Even though a few may find ways to avoid it, food stamps 
are spent for food, therefore making diets more adequate." 



Aid to Non-Public Assistance Households, the Working Poor , 
Those Temporarily in Need, and the Recently Unemployed — Respond- 
ents saw the Food Stamp program as perhaps the only type of aid 
available to these types of households, i.e., those not necessarily 
below the poverty line but having difficulty making ends meet. 
These responses tended to emphasize the income supplement provided 
to such families. Some referred to the maintenance of these type 
households' self-respect with food stamps, as opposed to welfare. 
Said the executive director of an urban ministry: "The sliding 



365 

-39- 



scale permits a person to work and earn income and still find 
assistance possible. This takes pressure off the person, allows 
him to keep some pride, and actually encourages him to do better 
for himself." Observed a legal services food stamp specialist: 
"Income and resources eligibility limits allow households of low 
to moderate income to participate during periods of unemployment 
and temporary financial difficulty." 

General Federal Policy — Community groups applauded the 
original legislative intent of the Food Stamp Act — to provide 
low income households the opportunity to purchase a nutritionally 
adequate diet, and they approved of the program's nationwide imple- 
mentation with national standards of eligibility. The director 
of a nutrition legal task force stated: "Federal legislation 
requires that the Food Stamp program provide a means by which a low 
income family can purchase an adequate diet. The present coupon 
allotment is not high enough to accomplish this. However, the 
legislative intent is good." 

Itemized Deductions — Community groups felt that the current 
system of allowing itemized deductions best reflected household 
circumstances, because the net income after deductions represented 
the money actually available for purchase of food. Said the assistant 
director of a community services administration group: "The indi- 
vidual computations deducting actual child care costs, medical costs, 
etc., seems to me to be the fairest way to treat everyone equally." 

Better than Commodities . — In comparison with the now phased- 
out commodities program, community groups indicated that food 
stamps allowed recipients greater food selection and the satisfaction 
of shopping in the place of their choice. 

Economic and Agricultural Benefits — Respondents observed 
that the infusion or Federal food stamp "bonus" dollars stimulate 
their local economy through the multiplier effect of households' 
increased food purchasing power channeled through local retailers. 
A community nutrition advocate called the program "A spur to the 
local economy" and said "Last year $254,870 was alloted in bonus 
value to [our] county residents. This money is spent and taxed 
at the local level, which puts more money into the local economy. 
Community groups also noted that food stamps allowed for increased 
consumption of American farm products by our own citizens. 

Emergency (Zero Purchase) Certification — The availability 
of quick emergency certification for those hous.eholds whose income 
places them at the zero purchase level was considered an important 
service to needy households. A paralegal worker said it "prevented 
destitution for many of my clients." 

Outreach — Community groups noted that in their area expanded 
outreach was commencing, or that outreach was being successfully 
carried out by food stamp offices or community groups. 



366 



40- 



Basis of Issuance Standards — Respondents found that food 
stamp basis of issuance standards, as determined by household 
size and income, were equitable and allowed for participation 
at the household's level of financial ability and nutritional need 

Retailers — The multitude and variety of retail food outlets 
readily accepting food stamps was mentioned as one of the more 
successful facets of the program. 



********** 



367 

APPENDIX VI 
Rationale for Criteria for Food Stamps, 
Aid to Dependent Children, 

and 

Supplemental Security Income 



369 




®L&. ^ouse of fcepresentatibe* 

Committee on Agriculture 

&oom 1301. Xsngtoortt) »ou»t &ilut HaiQiing 

«Hasf)ington, 3B.€. 20515 

December 5, 1975 




JEMKETTX. J«_ ■ -C- 



Dear Mr. Staats: 

As part of the study into the Food Stamp Program being made 
by the House Committee on Agriculture, it has become apparent that 
significant differences exist in certain aspects of various public 
assistance programs. The rationale for those differences is often 
not apparent. In considering possible legislative changes to the 
Food Stamp Program, it would be most helpful to know how various Food 
Stamp legislative and administrative requirements differ from other 
assistance programs so that proposed Food Stamp legislation can be 
considered in the context of its relationship to similar programs. 

There may not be reason at all for some of the current differences. 
These ought to be identified so they can be dealt with expeditiously. 
Others, however, may reflect fundamental differences in program objectives. 
These need to be identified and the choices and implications made explicit. 

I am, therefore, requesting the General Accounting Office to identify 
existing differences among the Food Stamp, Aid to Families with Dependent 
Children, and the Supplemental Security Income Programs, in connection with: 

1. The application process. 

2. The treatment of income. 

3. The treatment of resources. 

4. The length of certification periods, and 

5. Work registration. 

Once identified, reasons, if any, for the differences should be 
determined. Effort should then be made to sort out those that could be 



370 



corrected within existing law and policy. The implications of such changes - 
would then be considered, including advantages and disadvantages. 

These issues have been preliminarily discussed between Committee 
staff and representatives of your office. It has been agreed that our 
respective staffs will maintain close communication in carrying out this 
request. Also, any adjustments to the scope of the work will be made as 
needed and mutually agreed on. 

To be of use to the Committee for planned hearings, this information 
is needed by the end of February, 1976. I suggest that an oral briefing 
be provided by that date to be followed by a written report. Because of 
the tight timeframe to develop this data, and the fact that the General 
Accounting Office will be providing only factual data without conclusions 
or recommendations, formal comments are not to be obtained from the agencies 
involved . 

With kindest regards, 

Sincerely, 



Thomas S. Foley 
Chairman 

Honorable Elmer B. Staats 
Comptroller General of the United States 
General Accounting Office Building 
Washington, D.C. 20458 



TSF: jsa 



371 



COMPTROLLER GENERAL OF THE UNITED STATES 

WASHINGTON. D.C. 20548 



RECEIVED HOUSE AGRICULTURE COME! 



DEC 2 2 W r 



A-51604 



December 18, 1975 



The Honorable Thomas S. Foley 
Chairman, Committee on Agriculture 
House of Representatives 

Dear Mr. Chairman: 

We have received your letter of December 5, 1975, 
concerning differences that exist in certain aspects of 
various public assistance programs. This matter has been 
referred to our Manpower and Welfare Division. 

If they have any questions concerning your request, 
or will not be able to develop the data requested in the 
near future, you or your staff will be contacted. 



Sincerely yours, 




Peter J. McGough 
Legislative Adviser 
Office of Congressional 



Relations 



373 




COMPTROLLER GENERAL OF THE UNITED STATES 
WASHINGTON. D C. 20S46 



A-51604 



MAY 1 1 1976 



The Honorable Thomas S. Foley, Chairman 
Committee on Agriculture 
House of Representatives 



Dear Mr. Chairman: 



In your letter of December 5, 1975, you requested that the General 
Accounting Office identify differences in five aspects of the Food Stamp, 
Aid to Families with Dependent Children (AFDC) , and Supplemental Security 
Income (SSI) programs. You also requested that we determine the reasons 
for any significant differences identified. 

We met on several occasions with members of the Committee staff to 
brief them on information being developed and to ensure that we were 
concentrating our efforts on the areas of greatest interest to the 
Committee. In March 1976, the Committee staff advised us that they 
needed the results of our work in time to be used for consideration of 
a proposed bill to amend the Food Stamp Act. As a result, on April 20, 
1976, we delivered to the Committee 200 copies of a Statement of Facts 
in lieu of a formal report. The Statement of Facts contains a detailed 
discussion on the following aspects of the Food Stamp, AFDC, and SSI 
programs: 

— verification actions associated with the application process, 

— treatment of income in determining eligibility for and amount 
of benefits received, 

— treatment of certain resources in determining eligibility, 

— issues regarding eligibility redeterminations or recertif ications, 
and 



— work registration. 



Also, schedules comparing the requirements of the law and regulations 
for the Food Stamp, AFDC, and SSI programs were included for the last 
four of the above cited program aspects. 



MWD-76-131 



374 



A-51604 



The information included in the Statement of Facts was obtained 
from reviewing appropriate laws and their legislative histories, regu- 
lations, and agency documents. Also, we interviewed various program 
officials to determine the rationale for various regulations. 

Subsequent to our providing the 200 copies to the Committee, it 
was agreed by the Committee staff that we could make distribution of 
copies of the Statement of Facts to anyone requesting it. 

We trust that the information provided will be useful to the 
Committee . 



Sincerely yours, 




Deputy Comptroller General 
of the United States 



- 2 - 



375 

STATEMENT OF FACTS 
ON THE RATIONALE OF 
CRITERIA FOR THE 
FOOD STAMP , AID TO FAMILIES 
WITH DEPENDENT CHILDREN, 
AND SUPPLEMENTAL SECURITY 
INCOME PROGRAMS 



APRIL 1976 



377 



TABLE OF CONTENTS 



INTRODUCTION 



APPLICATION PROCESS 



Verifying application information 
as specified in the 
Federal regulations 

TREATMENT OF INCOME IN DETERMINING 
ELIGIBILITY FOR AND AMOUNT OF 
BENEFITS TO BE RECEIVED 

Underlying concept upon which items 
are to be included or excluded 
from income in determining eligibility 
and benefits 

Determination of the assistance unit 



Use of gross vs.net income to 
determine eligibility 

Time period used to compute 
income when determining 
eligibil ity 

Effect of work incentive provisions 

TREATMENT OF CERTAIN RESOURCES 
IN DETERMINING ELIGIBILITY 



Method used in placing a value on the 
home in determining an individual's 
total resources 



Limit on the value of an automobile 
that can be excluded from an 
individual's resources 

Limit on amount of personal property 
which can be excluded from resources 
and what can be counted as personal 
property 



378 



Page 



ISSUES REGARDING ELIGIBILITY 
REDETERMINATIONS OR RECERTIFICATIONS 42 

Actions taken to redetermine or 
recertify eligibility for 

assistance 42 

Treatment of an individual's benefit 

status during the appeal's process 44 

Redetermination and recertif ication 
periods 47 

WORK REGISTRATION 50 

Individuals required to register and 
additional actions to be taken 

by registrants 50 

Percentage of individuals in 
work registration program 

who become employed 55 



SUMMARY SCHEDULES 



I - Treatment of income 



58 



II - Treatment of Resources 



55 



III - Length of certification periods 



59 



IV - Work registration 



71 



379 



INTRODUCTION 

This statement of facts deals with a comparison of the Food Stamp 
Program with the Aid to Families with Dependent Children (AFDC) and 
Supplemental Security Income (SSI) Programs in the following five areas 
of program administration: 

(1) Application process-verifying application information 
as specified in the Federal regulations; 

(2) Treatment of income - various aspects of income all 
relating to hww an income figure is computed for purposes 
of determining program eligibility and levels of benefits; 

(3) Treatment of resources - methods used to value resources 
and what resources are considered when determining program 
eligibility; 

(4) Length of certification periods - explanations of the 
difference between redeterminations and recertif ications and 
the processes, appeals procedures, and time periods used for 
each; and 

C5) Work registration - who must register for work, what other 
actions they must take and what percentage of work registra- 
tion program participants became employed. 
This statement of facts is based on a review of reports, agency 
regulations, and policy statements, and on statements made by program 
officials when written statements were not available to explain the 
rationale for agency regulations. 



75-969 o - 



76 - 



380 

The following pages show what legislation and regulations pertain 
to each of the five areas of program administration and, when possible, 
the Congressional or departmental intent behind them. Also included are 
comparison schedules which show the similarities and differences in the 
legislation and regulations discussed. 



381 



APPLICATION PP.CCZ5S 

TOLIFTPjC APPLICATION INTQRMATION Ao SPECIFIED gj THE -TIEPAI RECTftATIONS 

rood Stamp Program 

Not all information reported on the application form nust be veri- 
Food and Nutrition Service (FNS) 
fied. However, / regulations (FNS regulation 271.4(a) (2) (ill)) require 

that, at a minimum, a household's gross non-exempt income and mandatory 

payroll deductions must be verified. Verification of income is required, 

not only because such procedures preserve the integrity of the food stamp 

program, but because income is the primary factor that determines eli- 

i 

gibility and the amount of "bonus" stamps a household will receive.* 
Verification of other items affecting eligibility, such as resources, 
most income deductions, household size, and proof of residency, is not 
required but may be done if the information provided by the applicant 
is suspect, unclear, incomplete, or inconsistent. 

Sources of verification include documentary evidence, heme visits, 
and secondary contacts to confirm applicant statements . Applicants are 
primarily responsible for furnishing documents sufficient for verifi- 
cation, or at least information from which the verification nay be made 
by the caseworker. 

.According to Pood and Nutrition Service officials, administrative 
ease and the Department of Health, Education, and Welfare's movement in 
L971 toward "self-declaration" for APTX applicants were factors in not 
requiring mere extensive verification. However, as a practical natter, 
State quality control reviews are probably encouraging more extensive 
verification by local welfare offices in order for them to reduce program 
errors. 

It is possible to certify a household's rood stamp eligibility 
pending verification when the household's income is so lew chat the 
household has no purchase requirement and would receive zzee stamps free 

The "bonus'' is the difference between the face value of food stamps 
and their purchase price. 



382 

and the caseworker determines that the household is in need of immediate 
food assistance. This certification may be made only if the results of 
the interview indicate that the household will probably be eligible when 
full verification has been completed and a minimum of one secondary 
contact such as a telephone call to an employer or local bank has been 
made. In these instances, the period of certification shall not exceed 
1 month, and a household may not be certified in this manner more than 
once during any 6-month period. 
AT DC Program 

The section of the Federal regulations which deals most specifically 
with verification of information on an Aid to Families with Dependent 
Children (AFDC) program application for benefits is (45 C7R 206). This 
section of the regulations provides that "each decision regarding eli- 
gibility or ineligibility will be supported by facts in the applicant's 
or recipient's case record, but it does not enumerate specific items on 
the AFDC application which must be verified. The cited regulations 
specify that the State agency must verify that a case record contains 
the necessary social security numbers (33N). 

The social security numbers are used to verify the identity of 
individuals. If a case record did not contain SSN's and if a State had 
in existence and operating before January L, 1975, a system of welfare 
records for which disclosure of SSN's was required by statute or regula- 
tion, then the individuals were required to obtain SSN's. If no system 
was in existence prior to January 1, 1975, then furnishing SSN's was 
voluntary through August 1, 1975. After August 1, 1975, all individuals 
were required to furnish SSN's. The State agencies are required to 
also obtain and verify evidence required to establish the age, citizen- 
ship or alien status, and true identity of each applicant. 

There are, in addition to Part 206, other parts of the regulations 
which imply that verification of information must be achieved during the 



383 

eligibility determination process. If a child's eligibility for AFDC 
is based on a parent' s* incapacity (45 CFR 233.90(c) (1) (iv) ) provides 
that if a parent claims to be incapacitated, the incapacity "shall be 
supported" by competent medical testimony. The regulations provide in 
(45 CFR 233.90(c)(l)(vi)) that a child who claims to be a student must 
be "certified by the school or institute attended" as being enrolled in 
and physically attending a program of study or training leading to a 
certificate, diploma, or degree. These requirements can be construed 
as being forms of verification. 

An HEW official indicated that in the establishment of the eligibil- 
ity determination procedures there was a deliberate attempt by the 
Department of Health, Education, and Welfare (HEW) to permit each State 
to specify in their State plans for public assistance the exact infor- 
mation on an AFDC application that must be verified. HEW interpreted 
verification in its Public Assistance Handbook by stating that a State 
plan for AFDC is required to provide that the verification of circumstances 
pertaining to eligibility is to be limited to what is reasonably necessary 
to ensure the legality of expenditures under 'the program. It can be 
inferred from this that the information which will be verified on an 
application will vary depending upon each individual State's interpretation 
of this requirement. 

The quality <ontrol program can act as an incentive to States to 
adequately verify information on AFDC applications. Results of past 
quality control reviews have indicated that many of the errors which are 
found during these reviews often result from poor verification procedures. 
The States' knowledge of the results of quality control reviews may have 
some effect on the amount of verification which they perform. 



384 

SSI Program 

The verification requirements in the SSI application process are 
defined in Public Law 92-603, dated October 30, 1972. The law requires 
that eligibility for benefits will not be determined solely on the 
basis of declarations by the applicant and that relevant information 
will be verified from independent or collateral sources. 

No Federal regulations have been published regarding SSI's veri- 
fication requirements. However, SSA has developed instructions concerning 
the verification requirements which are contained in a claims manual. 
This manual requires that claimants and recipients must provide SSA 
with detailed information to permit verification, development, and deci- 
sions on each factor of eligibility. The claimants responsibility is 
to answer questions raised by SSA to the best of his or her knowledge, 
to report changes to answers previously given, to submit evidence, and 
to undertake activities (such as signing necessary releases or requests 
to third parties and sources of evidence) that are critical to claims 
and report processing. The claims manual also gives a detailed explanation 
of the verification and development requirements for each eligibility 
factor. For example, the claims manual requires the amount in a passbook 
savings account be developed by documenting the name and address of the 
financial institution, the account number, the name ( s ) on the account 
and the amount in the account. The current balance of the savings account 
is verified by examining the passbook and photocopying the pages which 
show activity in the last 60 days. If the passbook shows deposit and 
withdrawal activity inconsistent with the individual's stated financial 
situation, the activity in the account must be developed fully to establish 



6 



385 

his source of income. If the passbook is not available or appears to 
have been materially altered, verification is obtained by contacting 
the institution after securing the individual's authorization. 



386 



TREATMENT OF INCOME IN DETERMINING 
ELIGIBILITY FOR AND AMOUNT OF BENEFITS 
TO BE RECEIVED 



UNDERLYING CONCEPT UPON WHICH ITEMS ARE 



TO 


3E INCLUDED 


OR EXCLUDED 


FROM INCOME 


IN 


DETERMINING 


ELIGIBILITY 


AND BENEFITS 



Food Stamp Program 

Several concepts are involved in deciding whether certain types of 
income are included or excluded, or whether certain expenses are deducted: 
inclusion or exclusion by law, ease of administration, work, incentives, 
the availability of the income to a household, benefit equity between 
households receiving and not receiving public assistance, whether the income 
is more aptly shown as a resource, and consistency with other welfare programs. 
For example, in-kind shelter furnished by an employer is included as income 
in accordance with the Food Stamp Act as amended in 1973, while other in- 
kind payments such as produce from a garden are excluded from countable 
income because they are difficult to document and accurately value. 

Vendor payments (payments made on behalf of a household to a vendor except 

in the household) 

for medical costs, e.g. payment made to a utility by a person not residing / 
are counted as income in an effort to assure that households receiving the 
benefit of such payments are not given an eligibility or benefit advantage 
over other households not receiving vendor payments simply because of the 
method of payment involved. A Federal District Court in California, 
however, recently barred FNS from including as income, Department of Housing 
and Urban Development (HUD) financial assistance furnished to households 
through vendor payments. Pursuant to this court order, FNS 

in February, 1976, amended its instructions to exclude HUD vendor payments 



387 



as income. The Department of Agriculture is currently appealing the Federal 
District Court decision. 

Other types of payments to households, such as irregular income up to 
$30 quarterly per household, are excluded for ease of administration since 
these payments are difficult to anticipate. One time lump-sum payments of 
money from sources such as insurance policies, sale of property, income 
tax refunds, cash prizes, and inheritances are not considered recurring 
monthly sources of income to the household and therefore, are also excluded 
from countable income. 

Examples of payments excluded from income by law are payments received 
under Title II of the Uniform Relocation Assistance and Real Property 
Acquisition Policies Act of 1970, income received by volunteers for services 
performed in the national older Americans volunteer program, assistance 
received under the special supplemental food program for women, infants, 
and children, and refunds from the earned income tax credit. 

According to a Food and Nutrition Service official, deductions from 
countable income allowed by FNS regulations stemmed, in general, from the 
emphasis on adjusted net income as the basis for program eligibility and 
benefits. For example, this emphasis on the actual availability of income 
to a household was the reason for the deduction of court ordered support 
and alimony payments and for the deduction of shelter costs in excess of 
30 percent of a household's income after all other deductions are taken. 
An FNS official also provided the following, additional reasons for specific 
deductions : 



388 



Deductions ' 

Ten percent of earned income up - 
co a monthly maximum of $30 per 
household 

Automatic and mandatory deduc- 
tions from earned income (Federal, 
State, and local income taxes, 
and union dues) 
Payments for medical expenses 
(when the monthly costs exceed 
$10 per household) 



Child care expenses (when such — 
expenses are necessary for a 
household member to accept or 
continue employment) 
Unusual expenses incurred due to — 
disaster or casualty losses 
Tuition and mandatory fees — 
assessed by educational insti- 
tutions 



Reasons 

work incentive provision and 
consistency with AFDC's "30 and 
1/3" earned income deduction 
work incentive provision and general 
consistency with AFDC's work 
expense deduction 

equity for non-public assistance 
households with elderly members 
and equity between non-public 
assistance and public assistance 
households since medicaid vendor 
payments on behalf of public assis- 
tance households are excluded from 
countable income 

work incentive provision and general 
consistency with AFDC's work expense 
deduction 

a limited disaster relief provision 

Deductions for these items are 
allowed in order to balance the 
inclusion of scholarships as house- 
hold income 



10 



389 



AFDC Program 

The Social Security Act as enacted in 1935 stated that financial 
assistance was to be provided to needy dependent children but there was 
no statutory basis as to how need was to be determined. The basic under- 
lying concept establishing the treatment of income in determining need 
was added to the Social Security Act by the 1939 amendments to the act. 
The 1939 amendments stated that a State plan must "provide that the State 
agency shall, in determining need, take into consideration any other 
income and resources of any child or relative claiming aid to families 
with dependent children, or of any other individual (living in the same 
home as such child and relative) whose needs the State determines should 
be considered in determining the need of the child or relative claiming 

such aid " The act was amended "to provide greater assurance that the 

limited amounts available for (AFDC) assistance in the States will be 

distributed only among those actually in need and on as equitable basis 

as possible." This requirement has remained in effect to the present time. 

In the early 1960's, the Department of Health, Education, and Welfare 
began to revise certain program requirements found in its Public Assistance 
Handbook in order to respond to changed conditions and to correct inequities 
which had arisen among the States, especially in the area of needs deter- 
mination. A major revision related to the States counting anticipated income 
even if the actual payment was never made. An example would be the counting 
of court-ordered support from absent parents or promised contributions from 
relatives even though no money was actually received. HEW specified in the 
amended regulations that only net income available for current use would 



11 



390 

be counted. An HEW official indicated that HEW believed that Congress 
intended public assistance to be paid to meet current cash need, and only 
currently available income can meet that need. Therefore, only currently 
available items should be counted. 

The Federal regulations on need were revised in the mid-1960' s in 
order to simplify the administration of the program by not counting small, 
non-recurring amounts of income such as birthday presents or Christmas 
presents, earnings of children under 14 years of age, and other items 
of a casual and inconsequential nature. In adopting these regulations, 
an HEW official pointed out that HEW concluded on the basis of experience, 
that the staff time and cost far exceeded the income involved, that 
such income did not realistically become available to meet the families' 
living needs and that ascertaining and counting such income resulted inevi- 
tably in complexity and subjective judgments by agency workers. An HEW 
official indicated that the legal support for the regulations was based 
primarily on the State plan requirements for such methods of administration 
as are found by the Secretary to be necessary for the proper and efficient 
operation of the plan. 

Provisions were added to the Social Security Act by the 1967 amend- 
ments, which exempted certain income items from consideration in determining 
an individual's need. These provisions, referred to as "income disregards" 
were added to give recipients of AFDC benefits an incentive to go to work. 
Prior to the inclusion of these provisions, there was no provision in the 
Social Security Act which would permit States to allow an employed parent 
or other relative to retain any part of his earnings. The Congress believed 



12 



391 



that the income disregard provisions would provide the needed incentive 
for individuals to become employed and eventually become self-sufficient. 
(See pp. 24-26.) 
SSI Program 

The first $20 of income is excluded to give recognition to efforts 
working people made to provide for themselves in retirement. To encourage 
people to work and attempt to be self-supporting, the first $65 of earned 
income plus $1 for each $2 earned in excess of $65 is excluded. To" 
encourage blind and disabled individuals to return to gainful employment, 
their income is excluded to the extent the income is needed to pursue 
an approved plan for achieving self-support. 

To encourage blind and disabled children to continue their schooling, 
their income is excluded if earned while they are regularly attending 
school. Foster care income is excluded to permit a needy individual to 
continue as a foster parent and provide a home and guidance to a needy child. 
(See p. 28 .) 

DETERMINATION OF THE ASSISTANCE UNIT 
Food Stamp Program 

According to Food and Nutrition Service officials, the household concept 
is established in the Food Stamp Act. The use of households rather than 
individuals was in recognition of the fact that provision for food needs is 
generally made on a group basis rather than an individual basis. Families 
purchase and prepare food as a group, not individually and can therefore 
take advantage of certain economies of scale. FNS officials indicated 
that although the Congress originally intended that food stamps be a family 



392 

in-home assistance program, a U.S. Supreme Court decision required that the 
term "related individuals" be dropped from the definition of a household 
in the act. Therefore, members of a food stamp household need not be 
related. 
AFDC Program 

AFDC benefits are available for needy children who are (1) under the 
age of 18, or under the age of 21 if regularly attending a school, college, 
or university, or regularly attending a course of vocational or technical 
training, (2) deprived of parental support by reason of the death, continued 
absence from the home, or physical or mental incapacity of a patent, or 
unemployment of a father, and (3) living in the home of his father, mother, 
grandfather, grandmother, brother, sister, stepfather, stepmother, step- 
brother, stepsister, uncle, aunt, first cousin, nephew, niece, or in 
foster care under certain conditions. AFDC benefits are also available 
for the parenqbr other caretaker relative of a dependent child and, in 
certain situations, the parent's spouse. 

Legislative intent behind the determination of the assistance unit 
can be seen in the following section of congressional debate on the Social 
Security Act of 1935 (79 Cong. Rec . 9269-1935): "A State will not have to 
aid every child which it finds to be in need. Obviously, for many States, 
that would be too large a burden. It may limit aid to children living with 
their widowed mother, or it can include children without parents living with 
near relatives. The provisions are not for general relief of poor children 
but are designed to hold broken families together." The Social Security 



14 



393 

amendments of 1956 expanded the list of near relatives to include first 
cousins, nieces, or nephews so that additional children would have the 
advantages of life in a home maintained by close relatives. 

The standard for determining the degree of connection to a given house- 
hold a child must have to be considered "living with" a relative is not 
specified in any of the legislative materials which established the statute. 
There is no statutory reference to the possibility of temporary absence of 
the child from that household. Subsequent amendments to the act do-not 
further clarify or amplify the requirement of "living with". 

The act provides that the State agencies shall, in determining need, 
take into consideration any other income^r resources.... of any other 
individual (living in the same house as such child or relative) whose needs 
the State determines should be considered in determining the need of the 
child or relative claiming such aid. HEW's Office of General Counsel con- 
strued this as permitting States the option of including or excluding the 
above mentioned essential persons from the assistance unit. 

The provision relating to the inclusion of payments of AFDC benefits 
to the parent or other caretaker relative of a dependent child, and in 
certain situations, the parent's spouse, was added to the act by the Social 
Security Amendments of 1950. The purpose of adding this provision was 
stated as follows: "To correct the present anomalous situation wherein 
no provision is made for the adult relative and to enable States to make 
payments that are more nearly adequate, the bill would include the relative 
with whom the dependent child is living as a recipient for Federal matching 
purposes." (From H.R. Report No. 1300, August 8, 1950.) 



394 

S3I Program 

The assistance unit for Che SSI program is Che individual. Public 
Law 92-603 specifies Chat SSI benefics are available for each eligible 
aged, blind, or disabled individual. As staced in H.R. No. 92-231, 
Reporc of che Commictee on Ways and Means on H.R. 1 daced 
May 26, 1971, che term "aged" means an individual who is 65 years of age 
or older. An individual is considered "disabled" if chac individual is 
unable co engage in any subscanciai gainful accivicy because of some physica 
or mencal impairment which can be e:cpecced co resulc in death or has lasted, 
or is expected to last, for not less than 12 months. An individual is 
considered to be "blind" if he has visual acuity of 20/200 or less in the 
better eye vich che use of correccing lenses. Also included in chis defi- 
nition is the particular sight limicacion known as "cunnel vision." 

In discussing provisions relacing co assiscance for che aged, blind, 
and disabled, House Reporc No. 92-231 scares chac seme individuals, because 
of age, disabilicy, or blindness, are ncc able co supporc chemselves chrough 
work. In seme cases, chese individuals may receive relaciveiy snail amouncs 
of social security benefics on which chey have co survive. Contributory 
social insurance and other sources of income - privace pensions, annuicies, 
and ocher inccme from assecs - are sufficient to keep the total income of 
che majority of che aged, blind, and disabled from falling below che poverty 
line. The reporc scaces, however, chat these sources of income need to be 
supplemented for jome individuals by an effective assistance program admini- 
stered and financed by the Federal Government. The SSI program was designed 
to provide an income source for aged, blind, or disabled individuals whose 
income and resources are below a specified level. 



395 

USE OF GROSS vs. NET INCOME 
TO DETERMINE ELIGIBILITY 

Food Stamp Program 

The Food and Nutrition Service's basic policy is to measure the 

income available to a household to meet living costs — especially food 

expenses. Differing amounts of households' gross incomes are spent for 

items such as mandatory payroll deductions, mortgage payments or rent, 

utility bills, work-related expenses, school tuition, alimony payments, 

and medical expenses which all limit the households' food purchasing 

power. According to FNS officials, to use gross income to establish 

eligibility and determine a household's purchase requirement is to assume 

the availability of this amount at the food buying level. The result 

could be a purchase requirement beyond the means of the household. FNS 

officials therefore, believe that eligibility and purchase requirements 

based on disposable cash regularly available for food expenditures ameliorate 

the otherwise adverse effect on participation of the Food Stamp Act's 

buy- in provision whereby most participants must make a cash outlay to 

receive stamps. 

For administrative ease and because the FNS. feels there is no legal 
requirement to differentiate between applicants and eligibles, the food 
stamp program uses a "one-step" certification process where adjusted net 
income determines both eligibility and purchase requirement — as contrasted 
to AFDC's "two-step" process where gross income less certain mandatory 
exclusions first determines eligibility, and further adjustments are then 
made to arrive at the net income on which benefits are based. 



17 



75-969 O - 76 - 26 



396 



AFDC Program 

An individual's gross income is the basis used to determine whether 
he is eligible to receive AFDC benefits. In the AFDC program gross income 
means the income which remains after specified income exclusions are eli- 
minated but before income deductions are applied. (See pp. 58-64 for schedul« 
of income exclusions and deductions.) Therefore, in the treatment of income 
a two-step method is used in (1) determining an individual's eligibility 
and then, (2) the benefit amount to which he is entitled. In determining 
an individual's eligibility, various items of income are excluded. A 
person's eligibility is based on the gross income which remains after the 
income exclusions are eliminated. After an individual is found to be in 
need and to be eligible for program benefits, various work related deduc- 
tions are then applied to the indi' r idual 's income. The remaining net 
income figure after the deductions are applied is the 

figure which is applied to the State's needs standard in determining the 
amount of benefits to which an individual is entitled. 

The language of the Social Security Act is specific in providing for a 
two-step approach in determining eligibility and -then the amount of bene- 
fits. In part, the act states that the work related deductions are to be 
applied "in determining need" of individuals "receiving aid". To qualify 
for the application of the income disregard provisions, an individual must 
have already been deemed eligible. 

In a general discussion of the bill establishing the income disregard 
provisions found in House Report No. 544, dated August 7, 1967, the intent 



397 

behind Che establishment of these provisions is seen to be to provide 
incentives to AFDC recipients to take employment and, in many cases, 
increase their earnings to the point where they become self-supporting. 
The purpose of the disregards is to help people already receiving benefits 
to get off of public assistance and not to help those people who were 
previously found to be ineligible to get on the assistance rolls. 

The congressional intent behind establishing a two-step method was 
discussed and is clearly evident in the previously cited House Report 
No. 54A where the inequities of the two-step method were discussed and 
analyzed. It was pointed out that a family whose income fell below the 
State's needs standard could apply for AFDC and begin to receive benefits. 
If after receiving AFDC benefits the family began to receive income in 
excess of the State's needs standard, they could possibly continue to 
receive some AFDC assistance by applying income disregards. A family whose 
gross income was continually above the State's needs standard could not, 
however, take advantage of the income disregards provision in order to 
qualify for AFDC assistance. Thus an inequity exists wherein two families 
receiving equal incomes and having other similar circumstances are treated 
differently. Although this inequity was considered in framing the legisla- 
tion, che House Reporc indicaced Chac Che alcernacive of applying Che dis- 
regard co decermine eligibilicy would have added many millions of dollars 
to Che cose of Che AFDC program. 

The Social SecuriCy Acc provides Chac if an applicanc deliberacely 
reduced his or her income wichin a specified period of cime prior co applying 
for AFDC, che applicanc would noc be eligible for Che income disregard. 

1 Q 



398 



SSI Program 

House Report No. 92-231, dated May 26, 1971, (Social Security Amend- 
ments of 1971) did not discuss the gross income va. net income concept 
under the provisions relating to assistance to aged, blind, and disabled. 
However, the report, in discussing the Family Assistance Plan (FAP) which 
was intended to replace the AFDC program but was never adopted stated: 

"The bill also makes the earned income exclusion applicable 
in determining initial eligibility for benefits. This corrects 
an inequitable situation under present law in which families 
with the same income and resources are treated differently." 

This indicated an intent not to adopt the two-step approach for FAP which 

was and still is used for the AFDC program. Why the two-step approach was 

rejected for SSI was not stated in the report. 

TIME PERIOD USED TO COMPUTE INCOME 
WHEN DETERMINING ELIGIBILITY 

Food Stamp Program 

A household is certified to receive food stamps for a specified period 
of time determined primarily by the stability of a household's expected 
income and other circumstances during this time. The certification periods 
range from 30 days to 1 year with FNS regulations stating that 3 months 
shall be the normal certification period. 

Eligibility for food stamps is based on the household's needs during 
the period of certification, usually the current or near future time. The 
food stamp program uses anticipated or prospective income so that the pur- 
chase requirement is appropriate for the income expected to be available to 
the household during the certification period. 



20 



399 

There are no specific guidelines for most situations which would 
establish a specified period of time for which past income must be considered 
in estimating future income. The time period used to estimate anticipated 
income is generally left up to the judgment of the eligibility worker to 
use whatever information is available to make a reasonable estimate. 

To determine the eligibility of many school teachers, the case- 
worker must, according to FNS instructions, calculate income on an annualized 
basis. Consequently, a school teacher's gross income from employment under 
a contract which is renewable annually must be averaged over a 12-month 
period. The time period of the renewable contract would, therefore, 
determine the number of prior months which the caseworker must use for 
calculating gross income. 

The use of anticipated or prospective income is a significant factor 
in State quality control reviews reporting a high number of program 
errors. Such errors stem, in part, from the difficulty in estimating 
future income and from households not reporting changes in gross monthly 
income and total monthly deductable expenses of $25 or more as required 
by the Federal regulations. 

AFDC Program 

The Social Security Act does not specify the time period which is 

to be used to compute income when determining eligibility. HEW, in its 

regulations, indicated that only income that is actually available for 

current use on a regular basis will be considered. An HEW official 

stated that in many cases, applicants for AFDC benefits do not have a 
The official 

regular income. / said also that in cases where an individual has 
a regular income, eligibility for AFDC benefits is usually based on 
anticipated income for the month following the date of application 
because of the interpretation of the current regulations. 



400 



Regulations proposed by the Acting Administrator of the Social and 
Rehabilitation Service of HEW would require the States to utilize a "prior 
month budgeting" system. These regulations vere published in the Federal 
Register for comments on August 19, 1975. 

The regulations would require that for applicants, the budget period 
would be the 30 day period prior to the date of application. The payment 
month would begin no later than 34 days after the end of the corresponding 
prior month budget period. These regulations were proposed as a reform to 
further the proper and efficient administration of the States' plans and 
also to assure that the States were able to devote their resources to pro- 
viding maximum amounts of assistance to eligible persons. 

As of April 1, 1976, the proposed regulations to institute the prior 
month budgeting system have not been acted on. An explanation of the 
proposed regulations included in the Federal Register of 



401 

August 19, 1975, seated that some applicants for ATDC would have to 
be enrolled in Emergency Assistance or General Assistance until tr.eir 
income in appropriate budget periods dropped to eligibility levels, result- 
ing in increased costs to the States. It also indicated that the increase 
would be nominal and would be offset by savings in total ATDC payments. 
An HEW official stated that many of the negative comments received on the 
proposed regulations dealt with the increased costs which the States would 
have had to absorb . 
SSI ?rogram 

Public Law 92-603 states that the calendar quart ei is the time period 
used for determining eligibility fcr and amount of SSA benefits. According 
to House Report 92-231, (see p. 15 ) benefits are to be based on current 
income . 

SSA counts income in the month in which it is received. The SSI 
applicant estitaates the amount of income anticipated tc be received ir. 
the quarter of application and the following four calendar quarters . This 
information is recorded on the initial application. These estimates are 
used by SSA to compute the amount of SSI benefits due fcr each calendar 
quarter. If the application is filed in the second third month :: a 
calendar quarter, the benefit amount is computed cn a monthly basis fcr tha 
quarter. The SSI recipient is responsible for reporting any change between 
income actually received and the anticipated inccne previously reported. 
SSA recomputes the benefit amount for any calendar quarter in which a 
reported change occurred. This recomputatio- nay result in either an over 
or under payment for the month of the quarter in which the change in Incone 
occurred. 



402 



EFFECT OF WORK INCENTIVE PROVISIONS 
Food Stamp Program 

The exclusion from countable Income of the earnings of a student under 
18 — FNS regulation 271 . 3 (c) (1) (ii) (a) — is not intended to be a work incen- 
tive. Rather, it is an administrative tool to simplify certification of 
households which contain children who are part-time employees whose income 
is difficult to document and is usually so small and erratic that it may 
not affect the household's eligibility or purchase requirement. 

The earned income allowance whereby a household can deduct 10 percent 
of its employment income up to a maximum deduction of $30 monthly — FNS 
regulation 271 . 3 (c) (1) (iii) (a) — is a work incentive provision and is intended 
to cover the expenses directly related to employment, such as transportation. 
FNS said that no data are available to determine if this work incentive 
provision is effective. 
AFDC Program 

In applying the work incentive provisions when determining an individual's 
need and amount of benefits to which he is entitled, the law states that 
the first $30 of the total of earned income for a month plus one-third of 
the remainder of income can be disregarded. These disregards are applied 
uniformly throughout all the States. In discussing the treatment of work 
related expenses the law says that any expenses reasonably attributable to 
the earning of income must be taken into consideration. 

The Social Security Act and HEW's regulations do not specifically state 
what is to be counted as a work expense or how much of the expense is to be 
taken into consideration when determining an individual's need. This results 



24 



403 

in each State Interpreting the definition of work expenses in different 
ways and as a result, the treatment of work expenses varies by State. 

Ohio, for example, provides for a flat $50 deduction for work expenses 
for each working member of the assistance unit, unless proof is offered to 
support a higher amount. This $50 is to cover such expenses as transportation, 
uniforms, union dues, and miscellaneous deductions as involuntarily with- 
held income taxes, social security, compulsory retirement, and unemployment 
and disability contributions. 

Pennsylvania allows the actual cost of such personal expenses as trans- 
portation expenses and expenses for child care to be deducted from income. 
Also, the actual payroll deductions made by the employer such as social 
security, income withholding tax, and wage tax are also deducted from gross 
income . 

Massachusetts allows a standard deduction of $28 per month for a person 
employed full time for the additional cost of food, clothing, and personal 
care necessitated by employment. The actual costs of such expenses as 
taxes withheld, retirement, insurance, transportation, union dues, and 
special clothing are also deducted from gross income. 

California allows work expense deductions for such expenses as involun- 
tarily withheld income taxes, social security and compulsory retirement, 
and unemployment and disability insurance contributions. Actual cost of 
child care, additional food, clothing, personal incidentals, union dues, 
tools, licenses, and transportation which are required for employment are 
also allowed as deductions. 

The total amounts of expenses which can be deducted from gross Income 
in determining a net income figure to be used to determine need varies by 



23 



404 



State. As a result pf the different treatments of work expenses, an indi- 
vidual's net income figure could be different depending on the State in 
which he applies. As a result of the different net income figures and 
different needs standards in the States, the amount of benefits which would 
be received by an individual would vary depending on the State involved. 
Income disregard study 

The Social and Rehabilitation Service of the Department of Health, 
Education, and Welfare contracted with National Analysts, Inc., for-a 
study to measure the impact made by the earnings disregard provision of 
the Social Security Act upon the work response of AFDC recipients. From 
1969 through 1971, National Analysts, Inc., conducted a study which consisted 
of two series of interviews performed at two different points in time. The 
conclusions presented in reporting on the study were reached after analyzing 
the information obtained through the series of interviews. 

At the initial interview, a standardized presentation was made to 
preselected welfare recipients by National Analysts personnel introducing 
the earnings disregard provision and indicating the amount of welfare and 
combined earnings plus weii are each recipient would receive at different 
levels of earnings under the earnings disregard. • During the course of the 
initial interviews a total of 4,147 people were interviewed — 639 were male 
recipients in Camden and Los Angeles and 3,508 were female recipients in 
Chicago, Columbus, Dallas, Indianapolis, Jersey City, Miami, New York City, 
Richmond, San Francisco, and St. Louis. A follow-up interview was held 
approximately | year later to determine the extent to which the earnings 
disregard provision had constituted an incentive toward seeking or securing 



26 



405 

employment. Re-interviews were held with 406 of the original males and 
2,425 of the original females. 

The major findings of the study indicated that the earnings disregard 
provision had no measurable effect in increasing the work response of 
female AFDC recipients and little effect on male AFDC recipients. Most of 
the recipients of both sexes were still (or again) on welfare and unemployed 
at the time of the second interview. 

Although a lack of comprehension and inadequate recall by the people 
who were reinterviewed were considerations in undermining the effectiveness 
of the disregard, the major problem did not appear to be one of ■ .insufficient 
publicity for the earnings disregard. For some recipients, increasing the 
income disregard to above $30 and 1/3 might prove to be an incentive to 
seek employment. For many recipients, however, the existence of long 
lasting barriers to employment, such as ill health and child care respon- 
sibilities, are likely to prevent even a more liberal provision from having 
the desired effect. 

To assess the impact of the earnings disregard, recipients were asked 
what type of work related activities they had engaged in because of the 
disregard provision. The only work related result acknowledged by more than 
10Z of the respondents was job seeking; about 25Z of the men and 13% of the 
women said they had sought work because of the benefits derived from the 
earnings disregard. Fewer than half of these people who sought jobs actually 
obtained a job and virtually none of the respondents said that they had gone 
off of welfare because of the disregard. A majority of those re- interviewed 



27 



406 



(about 80% of the women and 707, of the men) said that they had not engaged 
in any work-related activities because of the disregard. 
SSI Program 

In the SSI program, two provisions are provided for in the law to 
encourage work, (1) the $65 earned income exclusion plus $1 for each $2 
earned thereafter, and (2) the exclusion of a blind or disabled person's 
income needed to pursue an approved plan for achieving self-support. 
Information was not obtained as to the effectiveness of these provisions. 
(See p. 13 for rationale behind establishment of work incentive provisions.) 



407 



TREATMENT OF CERTAIN RESOURCES IN DETERMINING ELIGIBILITY 

METHOD USED IN PLACING A VALUE ON THE HOME IN 
DETERMINING AN INDIVIDUAL'S TOTAL RESOURCES 

Pood Stamp Program 

The Food Stamp Act as amended provides that criteria for eligibility 

shall Include financial resources, including liquid and non-liquid assets. 

The Food and Nutrition Service believes that fair market value less 

encumbrances establishes a more accurate means of determining the amount 

the household has access to from a particular resource. It is this amount 

that the household would have to rely on if it were to divest itself of the 

resource. 

AFDC Program 

The resources which an individual owns must be evaluated and taken 
into account when determining whether he is needy and eligible to receive 
'AFDC benefits. The major resource which must be dealt with andevaluated 
is the home owned by the applicant or recipient. 

The current regulations of the Department of Health, Education, and 
Welfare do not require a uniform method to be used throughout the States 
in determining the value of an individual's home. .The regulations state 
that resources are to be reasonably evaluated. An HEW official stated 
that each State, in its plan for AFDC, can set a limit on the maximum value 
of a home which can be excluded from being counted as part of the total 
resources owned by an individual. There are no specifications in the HEW 
regulations currently in effect which indicate what evaluation method must 



2S 



408 j 

be used in making the determination. It is up to each State to decide 
whether it wants to use market value, assessed value, or owners equity. 
The latest available statistics showed that 3 States used assessed value, 
8 States used owners equity, and 3 States and 1 jurisdiction used market 
value in determining whether a home falls within or exceeds specific maximum 
limits established in those States. Allowable values for homes in these 
States range from $2,500 to $25,000. Thirty-nine States or jurisdictions 
did not place a maximum value on a home which could be excluded, therefore, 
they did not need to indicate a valuation method to be used. 

Revised HEW regulations which were issued on March 19, 1975,- contained 
a provision that real and personal property had to be valued at gross market 
value including encumbrances. This provision, however, was not put in 
effect because a restraining order was issued by the United States District 
Court for the District of Columbia which temporarily prohibited it3 
implementation. The States were instructed to defer implementation of the 
amended regulations until further notice was provided. Therefore, the 
States are continuing to use the regulations which were in effect prior to 
the issuance of the amended regulations. 

The restraining order was placed on the provision in the regulations 
dealing with the treatment of resources (45 CFR 233 . 20 (a) (3)) because 
various welfare rights organizations felt that the regulation restricted 
the States' power in determining what resources a needy family should retain. 
They argued that the regulations required States to apply national standards 
to resources rather than being able to exercise their own judgment in these 
matters. Also, these organizations, which represent welfare recipients, 



409 



argued that the regulation was arbitrarily and capriciously promulgated as 
it could not be supported by any factual basis in the administrative record. 

On July 31, 1975, the U.S. District Court for the District of Columbia 
upheld the HEW Secretary's power to require States to consider the fair 
market value of an item of property without regard to encumbrances in valuing 
reserves. The Court also ruled that all other specific terms of the 
challenged amendments to the regulations were reasonable. The plaintiffs 
then requested the Court to delay the implementation of the regulation 
until they had a chance to appeal the decision to the United States Court 
of Appeals for the District of Columbia. 

On February 20, 1976, in its opinion on this case No. 75-1754 (National 
Welfare Rights Organization, et. al, v. F. David Matthews, Secretary of HEW) 
the United States Court of Appeals stated that since the AFDC program pro- 
hibits the counting of income before it is actually received, there must 
also be a prohibition against valuing property at fair market value plus 
encumbrances. The Court stated that valuing resources without regard to 

encumbrances violates the availability principle previously followed by the 
and 

AFDC program, /it cannot be assumed that because property is available, 
gross market value (and not equity) is available . ' 

In considering the matter, the United States Court of Appeals for the 
District of Columbia Circuit concluded on February 20, 1976, that review 
of the regulations was impossible because support for the decisions made 
by the Secretary in relation to the treatment of resources could not be 
found. The Court of Appeals invalidated the amendment thus reversing the 
lower court decision which had upheld the rule. 



31 



410 



SSI Program 

Public Law 92-603 allows the exclusion from resources of a home to 
the extent that its value does not exceed a reasonable amount as determined 
by the Secretary. 

House Report No. 92-231 stated that the provision to exclude a home 
generally follows State practices permitted under the previous aged, blind, 
and disabled programs. In discussing the home exclusion provision of the 

Family Assistance Plan of H.R. 1, the report stated: 

t 

"Since one of the purposes of the bill is to help families 
take their place as productive members of society, it seems 
appropriate to avoid disincentives to home ownership. . ." 

In providing background for its proposed policy on the reasonable 

value of an excludable home, SSA arrived at the same conclusion for the 

SSI program: 

"Basic social policy underlying title XVI is to help individuals 
minimize dependency and maintain a degree of self-support. In 
view of the provisions of title XVI relating to vocational rehab- 
ilitation, plans for self-support, property essential for self- 
support, and treatment for drug or alcohol abuse, one of the 
purposes of title XVI also seems to be helping individuals take 
their place as productive members of society. Thus, disincentives 
to home ownership would be inappropriate." 

The Secretary's decision was to set a $25 ,000- value ($35,000 in 
Alaska and Hawaii) determined by the market value which served as the 
basis for the latest property tax assessment. Some of the factors con- 
sidered in arriving at this decision were: 

— Because of the substantial variations in home values in different 
regions and localities, the lower the maximum value allowed, the 
more inequities that will result for individuals living in higher 
cost areas. 



411 

—Most individuals whose income and resources are low enough to 
qualify for payments under title XVI will not be able to afford 
to maintain expensive housing. For this reason, the income 
and resources limitations in title XVI tend to make the home 
exclusion provision self -regulating , and the establishment of a 
maximum permissible home value is unnecessary. 

— A limit set too high would present a public relations problem. 
The public would perceive the high limit as an opportunity f or * 
people with substantial resources to be eligible for welfare. 

— The 1970 National Center for Social Statistics report shows': 

— About 28 percent of current aged recipients live in their 
own home, 

— The estimated market value of 99 percent of these homes 

is under $25,000 (.8 percent over $15,000 but under $25,000), 
— 93 percent of homes owned by aged, blind, and disabled 

recipients have a market value of under $10,000. 
— Projections based on statistics derived from Office of 
Research and Statistics data and the census samples for 
1967 and 1970, indicate that, of the potential aged supple- 
mental security income beneficiaries who own their own homes: 
— 48 percent of the homes are valued at $10,000 or less, 
— 22 percent, between $10,000 and $15,000, 
—21 percent, between $15,000 and $25,000, 
— 9 percent, over $25,000. 



412 



Although SSA's recommendation did not include a discussion of the 

relative merits of the various values (market vs. assessed vs. equity), a 

SSA report on equity versus market value in measuring resources under the 

SSI program recommended "That current market value be retained ... as 

the measure for valuing resources because of its simplicity in administering 

the program and its clarity in communicating with the SSI population." 

LIMIT ON THE VALUE OF AN AUTOMOBILE THAT CAN BE 
EXCLUDED FROM AN INDIVIDUAL'S RESOURCES 

Food Stamp Program 

The Food and Nutrition Service told us that it has not attempted to 
place a dollar limit on excluded resources, such as a home or car, for 
administrative reasons. According to the FNS, good information is not 
available on the current value of excluded resources owned by participating 
households. The FNS therefore does not know what the impact of various 
dollar limits would be or what values should be considered reasonable. 
However, the Department of Agriculture is looking at the limitations used 
for the supplemental security income (SSI) program to see if these limitations 
can be adopted for use in the food stamp program. 

Other reasons for not having dollar limits on- excluded resources are 

that: 

1. the Department did not believe that the Congress originally in- 
tended that food stamp recipients be forced to impoverish 
themselves before being eligible for participation, 

2. an incentive to encourage program participation by eligible 
households was believed necessary, and 

3. an effort was made to be generally comparable with proposed 
family assistance plan guidelines. 

34 



413 



The Department has studies underway to determine the current value 
of excluded resources (including personal effects) owned by participating 
households. The Senate Agriculture Committee food stamp reform bill (S. 3136) 
also contains authorization for a similar study. 
Exclusion of more than one automobile 

FNS regulations exclude one currently licensed vehicle used for house- 
hold transportation and any other vehicles necessary for the employment of 
household members. FNS considers the exclusion of vehicles necessary for 
employment as a work incentive. It considered the exclusion of a vehicle in 
addition to those needed for employment transportation to be an allowance 
for a household to have transportation for both employed and unemployed 
household members. 

In many areas, particularly rural ones, a car may be needed not only 
for employment but also for household errands such as grocery shopping, 
food stamp purchases, and medical checkups. For administrative reasons, 
FNS has not attempted to define which areas do or do not support the need 
for a family car. FNS officials said this policy is currently being 
reconsidered for possible application of the standards used in the SSI 
program. 

On the basis of a strict interpretation of the regulations, a one- 
person household would be allowed to have two vehicles excluded from 
resources if the person proved that one vehicle was needed for employment. 
AFDC Program 

The treatment of an automobile as a resource varies from State to State. 
States have the option of specifying in their plans for the AFDC program the 



33 



414 



dollar amount of an automobile which is not to be counted in determining the 
individual's total resources during the eligibility determination process. 
The HEW regulations, as currently being interpreted, do not indicate a 
specific maximum limit on the value of an automobile that can be excluded 
from resources which must be adhered to by all States. The Department gives 
each State the power to establish its own maximum limits. The latest available 
statistics showed that 16 States and 3 Jurisdictions completely excluded 
a car from resources without any restrictions as to maximum value or age, 
18 States and one jurisdiction had some type of restriction pertaining to 
the value or age of a car which could be excluded, and 16 States did not 
provide for the exclusion of any portion of the value of a car. 

The aforementioned revised regulations concerning the determination of 
need and amount of assistance (45 CFR 233.20(a)(3)) issued on March 19, 
1975 (see p. 30) also added a provision which stated that an automobile could 
be excluded from an individual's resources if its retail market value did not 
exceed $1,200. Any anount in excess of $1,200 would be counted against the 
individual's resource limit. Implementation of the provision limiting the 
value of an automobile to $1,200 was delayed because of the previously 
mentioned restraining order which was placed on this section of the regula- 
tions by the District Court. 

As a result of the subsequent decision of the United States Court of 
Appeals (see p. 31) this provision will not be implemented. In its opinion 
on the case, the Court stated that in considering the challenge to the $1,200 
figure as the exemption limit on a necessary automobile, it was not able to 



3G 



415 



evaluate the reasonableness of this figure. The Court stated that neither 
the notice of proposed rulemaking nor the Secretary's responses to comments 
received on the proposed regulations provided any insight into the basis 
for selecting the $1,200 limit. 
SSI Program 

In establishing the provision for the exclusion of an automobile from 
resources, Public Law 92-603 provides that in determining the resources of an 
individual there shall be excluded household goods, personal effects, and 
an automobile to the extent that their total value does not exceed such 
amount as the Secretary determines to be reasonable and other property which 
is so essential to the means of self-support of such individual as to warrant 
its exclusion. 

House Report 92-231 states further 

"The bill also contains an exclusion of resources essential 
to an individual's means of self -care of self-support, such 
as an automobile needed for purpose of employment, the tools 
of a tradesman, farm machinery, and the inventory of a small 
business. Your committee believes that if a recipient needs 
an automobile for necessary transportation, such as to obtain 
needed medicare treatment, it also should be an excluded 
resource." 

The Secretary set a $1,200 limit on the automobile, because at that time the 
AFDC program had set a $1,200 limit. 

Federal regulations specify the $1,200 exclusion and three situations 
in which an automobile of any value will be totally excluded. An automobile 
can be totally excluded if (1) it is used for employment, (2) it is used 
for medical treatment of a specific or regular medical problem of the 
individual or a member of his household, and (3) it has been modified for 
operation by or transportation of a handicapped person. 



416 

SSA has clarified two of the above situations in which an automobile of 

any value will be totally excluded: (1) an automobile is considered to 

be used for employment if it is used for transportation to and from work 

or as transportation at work or in a trade or business and (2) an automobile 

is used for medical treatment if it is used on the average of at least four 

times a year to obtain medical treatment. 

LIMIT ON THE AMOUNT OF PERSONAL PROPERTY WHICH CAN 
BE EXCLUDED FROM RESOURCES AND WHAT CAN BE COUNTED 
AS PERSONAL PROPERTY 

Food Stamp Program 

Personal effects are excluded from countable resources and include 

items such as clothing, jewelry, and collections (coin or stamp, etc.). 

"Household goods" such as furniture and appliances are also excluded. 

According to FNS officials, the reason these items are excluded without 

regard to their value is primarily for administrative ease. In addition, 

the FNS said there are no data to show that participating households have 

personal effects of any substantial value. However, the Department of 

Agriculture is reviewing SSI limitations in this area for possible adoption. 

. Examples of nonexempt "personal property" (as defined by the FNS) 

are: 

1. boats, 

2. aircraft, 

3. automobiles, trucks, and motorcycles which are not otherwise 
exempt due to their use in employment or self -employment or 
due to the automatic one-car exclusion, 

4. trailers and campers which are not used as an actual residence, 

5. houses not used as a residence or to produce income, 



33 



417 

6. land or livestock not producing income, and 

7. golf carts and snowmobiles. 

These personal property items are subject to a total allowable limit of 
$1,500 ($3,000 for a household with two or more members at least one of 
whom is 60 or over) . 

According to FNS officials, the Department of Agriculture's overall 
approach to income and resources was conditioned by the fact that food 
stamps were not a "total support" program (like AFDC or SSI) . Consequently, 
the Department had less concern for monitoring and verifying all the 
income and assets of applicants. 
AFDC Program 

The HEW regulations dealing with the treatment of personal property 
as a resource do not provide for a specific limit as to the amount of 
personal property which can be excluded from the total resources in deter- 
mining eligibility. The regulations state that the total amount of real 
and personal property which can be excluded shall not 

be in excess of $2,000. The home is dealt with separately 

in the regulations. It can be totally or partially excluded depending on 
the decision of the State agency. 

In its Handbook of Public Assistance Administration, HEW indicated 
that the reason that separate specific limits were not established for 
real and personal property was because it was more equitable to be flexible. 
The Handbook stated that if there were separate limits for real and personal 
property and one item in either category increased or decreased in value, 



39 



418 

eligibility could easily be affected, whereas a minor increase in only one 
item in either category within the total overall maximum ($2,000) would not 
affect eligibility as easily. This method eliminates the necessity of 
frequent openings and closings of cases. 

Regulations approved in March 1975, dealing with resources, raise the 
reserve limit from $2,200 to $2,250 for an AFEC family of up to four persons 
plus an additional $100 in personal property reserves for each additional 
eligible person. As indicated earlier (see p. 31 ) the amended regulations 
were declared invalid in part because support could not be found to support 
the reasons why this reserve limit figure was chosen. In commenting on the 
validity of the regulation, the Court stated that "judicial review is 
meaningless where the administrative record is insufficient to determine 
whether the action (taken by the Secretary) is arbitrary and capricious." 

An HEW official stated that there is no listing or definition in the 
Federal regulations which specifies exactly what is to be considered as 
personal property and personal effects. Another HEW official said that States, 
in their public assistance manuals are fairly specific as to what they choose 
to count as personal property and what they choose to exclude from personal 
property. 
SSI Program 

Public Law 92-603 permits exclusion of personal property in three 
categories: household goods, personal effects, and the automobile. The 
Federal regulations specify that household goods and personal effects are 
excluded if their total market value is $1,500 or less. As mentioned in 
the previous section, an automobile is excluded if the value is $1,200 or 
less. 



4C 



419 



Household goods are all personal property customarily found in the 
home and used in connection with the maintenance, use, and occupancy of 
the premises. Household goods include furniture, furnishings, linens, 
household applicances, carpets, dishes, television sets, tools, etc. 

Personal effects include nonliquid personal property which is worn 
or carried by the individual or has an intimate relation to him. Some 
examples are clothing, jewelry, recreational equipment, musical instruments, 
and hobby items. (One wedding and engagement ring are excluded regardless 
of their value.) 

Household goods and personal effects are assumed to be valued at 
less than SI, 500, if the individual states that he does not own any items 
of unusual value and there is no evidence to the contrary. 

If the individual states he has item(s) of unusual value ($500) , the 
actual current market value must be verified by recent sales or appraisals. 
Then the current market value of durable household goods and personal effects 
(i.e., items which have a significant resale value for an extended period 
of time) must be established. This category includes furniture and major 
appliances. 

The excess over $1,500, if any, for items of unusual value and durable 
household goods and personal effects, is applied in determining whether the 
$1,500 (individual) or $2,250 (couple) resource limitation is exceeded. 

If the resource limitation is exceeded, the applicant is not eligible 
for the SSI program. However, if certain conditions are met, the individual 
may receive a conditional payment while he disposes of the excess resources 
The conditioned payment is considered an overpayment and is repaid with the 
proceeds of the disposition of the excess resources. 



41 



420 



ISSUES REGARDING ELIGIBILITY REDETERMINATIONS 
OR RECERTIF ICATIONS 

ACTIONS TAKEN TO REDETERMINE OR 
RECERTIFY ELIGIBILITY FOR ASSISTANCE 

Food Stamp Program 

Individuals are determined to be eligible to receive food stamp bene- 
fits for specific periods of time. (See pp. 47-48.) According to the Food 
and Nutrition Service, entitlement to food stamps does not extend beyond 
the established certification period. Therefore, at the end of the certifi- 
cation period, the household's eligibility must be reestablished based, 
at a minimum, on the completion of a new application form and the results 
of a new interview. Verification of household income is required during 
the recertif ication process if the household income has changed substantially 
or if the source of the income has changed. Verification of other factors of 
eligibility is required only to the extent that information furnished on 
the application for the recertif ication is inconsistent with information 
furnished previously or if the information furnished is unclear or incomplete. 
FNS officials said that, since the certification period was predicated on 
the likelihood of change, recertif ication enables an objective determination 
to be made as to whether or not a household should continue receiving its 
present level of assistance. 
AFDC Program 

Once applicants have been determined to be needy and eligible for an 
AFDC assistance grants, they will continue to receive benefits until subse- 
quently found to be ineligible for assistance. Unlike the food stamp program, 
individuals are not periodically required to reapply as a new applicant for 



42 



421 

AFDC assistance. Instead, in order to insure that only needy people continue 
to receive the limited available AFDC benefits, their eligiblity is periodi- 
cally redetermined. 

Although the Social Security Act does not specify a redetermination 
procedure to be followed, HEW regulations (45 CFR 206.10) state that 
each State plan shall require-that standards and methods for determination 
of eligibility shall be consistent with the objectives of the program, 
and shall respect the rights of individuals under the United States . Consti- 
tution. Also, HEW regulations specify minimum time periods in which redeter- 
minations must be made but they do not indicate uniform redetermination 
procedures which are to be followed by every State. Each State, in its 
State plan, has the responsibility for establishing the redetermination 
procedures to be followed within the State. 

Thus, redetermination procedures vary by State, with some States experi- 
menting with different redetermination methods. Many States require recipients 
to provide information pertaining to their status as requested by the program 
official responsible for determining their continued eligibility. California 
requires AFDC recipients to send in forms once a month indicating any 
changes to their status. This, in effect, results in a monthly redetermina- 
tion. In addition to formal redeterminations, status changes for AFDC 
recipients are often reported by the recipients or discovered by program 
officials through various contacts made with recipients. Some States are 
also making an attempt to identify high-risk cases. In cases where circum- 
stances easily affecting eligibility are likely to change frequently, 
eligibility workers try to highlight them and spend more time reviewing 
these cases. The eligibility of individuals whose circumstances are more 



43 



422 



stable is redetermined less frequently. This allows the eligibility worker 
to budget his or her time more efficiently and allows more time to be devoted 
to those cases which warrant more attention. 
SSI Program 

Redeterminations are conducted to assure that payment is made only 
to an eligible person and that the amount of the SSI payment is correct. 
The redetermination consists of a current evaluation of the factors con- 
sidered in making the prior determination of eligibility and payment 
amount; e.g. marital status, residence, and living arrangements, earned 
and unearned income, and resources. 

The most desirable method of conducting a redetermiantion is a face- 
to-face interview. However, an interview is not necessary where there is 
concurrent entitlement to other SSA programs. When an interview is held 
a form entitled "Statement for Determining Continuing Eligibility for 
Supplemental Security Income Payments" is completed and signed by the reci- 
pient. In addition, all changes since the initial application or prior 
redetermination must be documented and verified. 

TREATMENT OF AN INDIVIDUAL'S BENEFIT 
STATUS DURING THE APPEALS PROCESS 

Food Stamp Program 

FNS officials told us that the use of indefinite certification periods 
would require notice of adverse action and appeal rights prior to recerti- 
fication of eligibility and benefits. 3y setting a definite expiration date, 
any subsequent recertif ication action while subject to appeal, takes effect 
immediately. At the time of initial or any subsequent certification, house- 
holds must be given written notice of when their certification period expires. 



44 



423 



No rationale was provided for Che regulation permitting benefit » 
termination or reduction pending an appeal when such action occurs as the 
result of certification expiration other than the explanation that the regu- 
lation is considered to be consistent with program structure and philosophy 
that food stamp entitlement does not extend beyond the certification period. 
AFDC Program 

Each State plan is required to provide for a system of hearings in 
which individuals who are found to be ineligible to receive benefits- or 
who have their benefits reduced or eliminated can appeal the decision. The 
State agency responsible for the hearings program shall provide'for a hearing 
before the State agency or an evidentiary hearing at the local level with a 
right of appeal to a State agency hearing. 

The HEW regulations (45 CFR 205.10(a)(6)) specify that if a recipient 
requests a hearing within the timely notice period (within 90 days), assis- 
tance shall not be suspended, reduced, discontinued or terminated (but is 
subject to recovery by the agency if its action is sustained), until a 
decision is rendered after a hearing. HEW regulations (45 CTR 205 .10(a) (1) (ii) ) 
also state that evidentiary hearings must meet due process standards set 
forth in the U.S. Supreme Court decision made in'Goldberg v. Kelly, 397 
US 254 (1970). 

In the cited Supreme Court decision the Court held that the "termination 
of aid pending resolution of a controversy over eligibility may deprive an 
'eligible' recipient of the very means by which to iive while he waits. 
Since he lacks independent resources, his situation becomes immediately 
desparate. His need to concentrate upon finding the means for daily subsistence, 



424 

in turn, adversely affects his ability to seek redress from the welfare 
bureaucracy . " 

The Supreme Court decision also added that "from its founding the 
Nation's basic commitment has been to foster the dignity and well-being 
of all persons within its borders. We have come to recognize that forces 

not within the control of the poor contribute to their poverty Welfare, 

by meeting the basic demands of subsistence, can help bring within the reach 
of the poor the same opportunities that are available to others to partici- 
pate meaningfully in the life of the community." 

The Court decision specified that the fundamental requisite of due 
process of law is the opportunity to be heard and that the hearing must 
be at a meaningful time and in a meaningful manner . The Supreme Court stated 
that the meaningful time for an AFDC appeals hearing was prior to the termi- 
nation or reduction of an individual's benefits. 
SSI Program 

SSA policy in cases where an SSI recipient's payment will be suspended, 
reduced or terminated is based on the agency's interpretation of the Goldberg 
v. Kelly case. 

District offices are required to send a written notice to an SSI 
recipient of SSA's intention to suspend, reduce or terminate payments. The 
recipient is allowed 30 days from the receipt of the notice (35 days from 
mail date) to send written notice requesting an appeal of the decision. If 
the recipient responds in 10 days from receipt of notice, the payments will 
be continued at prior payment level. However, a recipient may wish to waive 
the right for continuation of prior payment because if the reconsideration is 



46 



425 

against Che recipient, the recipient will have to pay back any money he 
was not entitled to recieve. If the recipient waives the right for contin- 
uation of prior payments and he is successful on reconsideration, any money 
due him will be paid. 

If the recipient does not respond in 30 days and does not have a 
good reason for the delay, SSA will not reconsider its decision. 
REDETERMINATION AND RECERTIFICATION PERIODS 
Food Stamp Program 

FNS regulations state that households are to be certified as eligible 
to receive food stamp benefits for specified periods of time. Food and 
Nutrition Service officials explained that certification periods are based 
on the probability that a household will experience a change in program 
entitlement status. FNS regulations state that non-public assistance house- 
holds are to be certified for 3 months unless they fall within the following 
categories. Households in which all members are included in a federally 
aided public assistance or general assistance grant shall be assigned certi- 
fication periods which coincide with the period of the assistance grant. 

FNS instructions recommend that all public assistance households 
be certified for program benefits corresponding to public assistance redeter- 
mination periods — every 6 months. State agencies and food stamp caseworkers 
may establish shorter periods when circumstances warrant. Non-public assis- 
tance households may be certified for less than 3 months when there is a 
possibility of frequent changes in income and household status. Households 
may be certified for up to 6 months if there is little likelihood of changes 
in income and household status. Households consisting of unemployable persons 



426 

with very stable income or whose primary source of income is from self- 

» 

employment (including self-employed farmers) or regular farm employment 
with the same employer may be certified for up to 12 months. 

The assumption that a non-public assistance household will experience 
a change in income or status over short time periods is based on the belief 
that conditions for "welfare" households remain relatively constant over 
time while conditions for "working poor" households are likely to fluctuate 
considerably, thereby affecting their basic eligibility for food stamp 
benefits. The food stamp program is therefore designed and operated with 
various certification periods. Reapplication for participation is required 
upon expiration of the certification period in order for a participant to 
continue receiving benefits. 
AFDC Program 

HEW regulations (45 CFR 206.10(a)(9)) state that eligibility redetermi- 
nations are to be made as often as necessary by the State agency with the 
minimum redetermination period being every 6 months for AFDC recipients. 
Redeterminations are required to be made promptly when changes affecting 
an individual's eligibility status or the amount of assistance to which 
he is entitled are brought to the attention of the eligibility workers. 
This implies that redeterminations can be made at any point in time as 
changes are made known. 

The regulations point out that the 6 month time period specified is 
the minimum period that a State plan must provide for between periodic redeter- 
minations. As indicated previously, some States are experimenting with new 
redetermination procedures (see pp. 43-4^ which result in more frequent rede- 
terminations in some cases. California is soliciting information from AFDC 



48 



427 

recipients every month to see if there are any changes in their eligibility 
status . 
SSI Program 

Currently, Federal regulations require that redeterminations will be 
made at intervals not exceeding 12 months and after information is received 
by SSA regarding a change in eligibility status or payment 

amount . 

According to an SSA memorandum on redeterminations in the SSI program, 
after SSA has had an opportunity to study the results of the redetermination 
effort, it is possible that selected categories of recipients will be 
identified as not needing a redetermination each year. For example, it may 
be established that recipients age 72 and over who have not had income in 
3 years simply do not require a redetermination each year. Also experience 
may provide that certain groups of recipients may require regularly scheduled 
redeterminations more frequently than annually. 



4S 



75-969 O - 76 - 28 



428 



WORK REGISTRATION 

INDIVIDUALS REQUIRED TO REGISTER AND ADDITIONAL 
ACTIONS TO BE TAKEN BY REGISTRANTS 

Food Stamp Program 

According to Food and Nutrition Service officials, the Department of 
Agriculture adheres strictly to the language of the Food Stamp Act regard- 
ing work registration. In order for a household to remain eligible for 
food stamps, all able-bodied members of that household between the ages 
of 18 and 65, except those specifically exempted by the act, such as mothers 
or other members of the household who have the responsibility of care of 
dependent children or of incapacitated adults, bonafide students in any 
accredited school or training program, or persons employed and working at 
least 30 hours per week, must register for work and accept it if offered. 
The FNS believes Congressional debate on this section of the act established 
that all household members, not just the head of the household, were sub- 
ject to this provision. 

FNS regulations state that the mother of a dependent child under the 
age of 18 is among those not required to register. FNS officials gave 
the following explanation as to why the term "dependent child" was interpreted 
to mean a child under 18 years of age. The 1971 food stamp amendments, 
which first required work registration, did not specify an age definition 
for dependent children. FNS considers 18 to be a generally accepted age 
limit for dependency. Unlike the AFDC program, which defines a dependent 
child as a child under 6, the food stamp program does not have funds appro- 
priated for child care facilities. FNS indicated that such facilities 



50 



429 

should be available if a mother with small children over 6 years of age 
is to be required to register for employment. 

Wherever food stamp legislation on work registration is specific, 
the FNS believes the Department of Agriculture has followed it in writing 
regulations. For instance, the wage standards set forth in FNS regulation 
271.3(d) (3) (i) are those specified in the act. Where the act is not 
specific, the Department has attempted to fulfill what it considers to be 
the intent of the Congress that a practical system of work registration 
be developed. 

FNS regulations therefore require that registrants report for an 
interview at the employment service office, provide additional information 
as requested, report to an employer when referred, accept a bonafide offer 
of employment, and continue employment. FNS regulation 271.3(d)(2) pro- 
vides that a household which fails to comply with these regulations without 
good cause will remain ineligible for food stamps for 1 year or until 
such time as the offending member meets these requirements. This regula- 
tion, in which FNS elaborates on the language of the law, is considered 
necessary for enforcement of these provisions. 

The work registration reporting procedures were developed in consul- 
tation with the Department of Labor. Although the Labor Department is not 
specifically mentioned in the act, it became involved through the legisla- 
tive requirement that food stamp recipients must register for employment 
at a State or Federal employment office. Also, the Labor Department had 
expertise in this area. 



51 



430 

In 1971 after consultation with the Department of Labor, the Department 
of Agriculture expanded the criteria on job suitability — FNS regulations 
271.3(d)(3) through (6) — and added a provision making work incentive program 
(WIN) registration sufficient for food stamp program purposes. FNS 
officials told us that this was done to have job suitability criteria con- 
sistent with the rules applied by employment service offices to others 
receiving similar services. 
AFDC Program 

In order to receive benefits from the Aid to Families with Dependent 
Children (AFDC) program, all eligible individuals are required by law to 
register for manpower services, training and employment unless they are 
specifically exempted. The Work Incentive (WIN) program, which is jointly 
administered by the Department of Health, Education, and Welfare and the 
Department of Labor, is used to register all non-exempt eligible individ- 
uals and exempt individuals who volunteer. The objective of the work 
registration requirement is the separation of employable and unemployable 
AFDC recipients so that efforts to improve employability can be directed 
to those individuals who can benefit most from them. 

After applying for AFDC benefits each non-exempt individual is referred 
to the appropriate WIN office where the work registration process is 
accomplished. The needs of any non-exempt applicant or recipient who fails 
to register as required will not be taken into account in determining the 
need and amount of the AFDC assistance payment. 

The initial legislation of 1967 which established the WIN program 
stated that each "appropriate" individual over the age of 16 who was 



431 



receiving benefits or whose needs were taken into account in determining 
the assistance grant amount had to register in the program. The legis- 
lation did provide for the following exemptions from the registration 
requirement: 1) people who were ill, incapacitated, or of advanced age, 
2) people who lived too far away from a WIN project location, 3) children 
attending school full time and 4) individuals who had to care for an ill 
or incapacitated member of the household. 

By 1971, problems in the initial legislation became apparent. The 
major problem centered around the definition of an "appropriate" individ- 
ual. This definition was left to the State welfare departments to interpret. 
In some States there was a strict interpretation of the word "appropriate" 
and, therefore, many people were referred to the WIN program and required 
to register for work. In other States there was a less strict interpreta- 
tion of the word "appropriate" and very few people were assigned to WIN. 
To correct this inconsistent situation, the 1971 amendment to the Social 
Security Act removed the "appropriate" provision and required "all" AIDC 
recipients, except those who were specifically excluded by law, to register 
for work through the WIN program. 

The 1971 amendments also made changes to the. list of already specified 
exemptions from the work registration requirement. In addition to the 
original exemptions the new legislation added the following: (1) mothers 
or other relatives of a child under the age of 6 who were caring for the 
child are exempt, and (2) the mother or other female caretaker of a child 
is excluded if the father or another adult male relative lives in the home 
and he is not specifically excluded from th« work registration require- 
ment. Since the word "appropriate" was eliminated from the legislation 



432 



and the word "all" was inserted, the specific exemptions pertaining to 
caretakers of children had to be added to the legislation. The mother 
of a child under the age of 6 is given the option of voluntarily regis- 
tering for work if she so chooses, and the legislation provides for her 
to be informed of any available child care services if she decides to 
register in the WIN program. 

Regulations contained in (45 CFR 224) specify additional actions 
which recipients of AFDC benefits are required to take after they have 
registered at the appropriate WIN office. Registrants are required "to 
attend an appraisal interview. The appraisal interview is held to determine 
which registrants are most likely to become employed. For those individ- 
uals found suitable to participate in the WIN program, an employability 
plan will be initiated. The employability plan shall specify whatever 
training and related services are required to prepare the individual for 
employment and ultimately for self-support. If an individual cannot be 
immediately placed in unsubsidized employment, he or she shall reeeive, 
as deemed necessary, intensive manpower services, on-the-job training, public 
service employment, or institutional training. 

An individual participating in the WIN program is not required to 
accept any training which does not lie within the scope of an employabil- 
ity plan or any work which is not deemed to be appropriate. The wage 
offered to a WIN participant must meet or exceed applicable Federal or 
State minimum wages and the hours of work are not to exceed those customary 
to the occupation. 

The individual does not have to accept a job if it is vacant because 
of a strike or other labor dispute. There are various other specific 



433 



criteria which determine if a proposed job or training program is to be 
considered appropriate. A WIN participant is required, however, to accept 
any assignment to employment or WIN training if it meets the defined stan- 
dards of appropriateness. The failure to accept appropriate employment 
or training will result in the individual "facing" deregistration from 
the WIN program. Failure or refusal without good cause to participate 
in the program will result in not taking that person's needs into account 
in determining the family's need for assistance. No sanctions are to be 
applied to any individual who refuses to participate for a period of 60 
days after an adverse decision if the individual accepts counseling and 
other necessary services aimed at persuading him or her to participate in 
the WIN program. 

An AFDC recipient can be provided institutional training under the 
WIN program for an average period of 6 months, but in no case should the 
maximum training period exceed 1 year. Participation by an individual 
in a work experience component should net exceed 13 weeks. Exceptions to 
the above time period limitations can be made for good cause. 
SSI Program 

There is no work registration requirement in this program. 

PERCENTAGE 6F INDIVIDUALS IN WORK REGISTRATION 
PROGRAM WHO BECOME EMPLOYED 

Food Stamp Program 

The following definitions and data were obtained from the Department 

of Labor on food stamp work registrants for fiscal year 1975: 



434 



REGISTRANTS — total number of individuals for whom 
work registration forms were filed at local food 
stamp offices and who were in the employment 
service active file for some period during fiscal 
year 1975. This number includes about 730,000 

carry-overs from fiscal year 1974. 2,591,970 
JOB PLACEMENTS — total number of individuals placed 

in jobs during fiscal year 1975. 196,917 
TRAINING PLACEMENTS — total number of individuals 

enrolled in training during fiscal year 1975. 29,161 
TOTAL PLACEMENTS IN FISCAL TEAR 1975 226,078 
PERCENT OF REGISTRANTS PLACED IN JOBS 7.8 
PERCENT OF REGISTRANTS PLACED IN TRAINING 1.1 
TOTAL PERCENT OF REGISTRANTS PLACED 8.7 
AFDC Program 

WIN officials told us that as of fiscal year 1975 there was a 
cumulative total of over two million people registered for the WIN program 
including 839,408 new registrations in fiscal year 1975. Of the total 
registrant universe, 586,060^ were actual participants in the work 
program in fiscal year 1975. (See p. 54.) Of these, 170,641, or about 
29 percent obtained jobs for which the employers received no subsidies 
from any source. Out of the 170,641 job placements, 113,485 were direct 
placements with individuals not participating in any training or work 
experience component. There were 52,700 individuals who completely went 



1/ 

~ This rigure indicates the number of transactions and not necessarily 
individuals. An individual can be a participant more than once during 
the fiscal year. 



435 

)ff of welfare during fiscal year 1975 because of obtaining a job, and 
50,616 individuals who reduced their welfare grants because of obtaining 
snployment. 



436 



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451 



APPENDIX VII 

Survey of State Administrators 

on 

Quality Control Process 



452 



453 



E DE LA GARZA. 



CHARLES ROSE, N.C. 



t>ouse of ftepresmtatiucS 

Committee on agriculture 

SRoom 1301, lanatportt) toousc <£>f fict Wu(lt>ina 

JHatffjington, 20515 

December 23, 1975 



JAMES P. 



JAMES M. JEFFORDS. 



TOM HAGtDORN 



BERKLEY BEDELL, IOWA 



Dear 

During its food stamp study this year, the House 
Committee on Agriculture has received a great many of the food 
stamp survey questionnaires and Quality Control review forms 
that were requested of state and local welfare administrators 
throughout the Nation, and it is compiling the data obtained 
for the Committee's Food Stamp Study Report. I would like 
to express the Committee's sincere appreciation to you and 
others in your State who have contributed in this substantial 
way to our study of the Food Stamp Program. 

There are, however, two areas in which we would very 
much appreciate additional assistance. The first is the 
Quality Control process. An initial review of the returned 
questionnaires revealed that about 80 percent of the state 
level jurisdictions believe the error detection and reporting 
aspects of Quality Control should be improved. This finding 
gains in importance especially when viewed in perspective 
with the Department of Agriculture's most recent report on 
Quality Control findings covering the July-December, 1974, 
period and the attendant attention given that report. Also, 
the validity of the Committee's analysis of Quality Control 
reviews for the month of April, 1975, depends heavily on the 
degree to which the Quality Control process yields a meaning- 
ful data base on the characteristics of program participants. 
Roughly one-forth of the returned state questionnaires cited 
problems in sampling, overall statistical validity or other 
areas associated with the use of Quality Control reviews. As 
the States are in a unique position to evaluate these factors, 
we have prepared the attached supplementary questionnaire to 
obtain your specific views. 

Illegal program abuse is the other area for which 
additional detailed data and state views would be very help- 
ful. Current national estimates of illegal abuse of the Food 



454 



Stamp Program range from "practically nonexistent" to 
"widespread". The Committee feels that it is critical, in 
the context of meaningful reform, to present this issue in a 
true and accurate perspective. To further this effort, we 
have developed a second questionnaire on which your assistance 
would be very much appreciated. 

In the interest of time and the many other demands facing 
state and local welfare officials, we have limited both 
questionnaires to state-level viewpoints. We encourage you, 
however, to include any other material on state arid local 
views you may desire. 

We would be grateful if the attached questionnaires could 
be completed and returned to the Committee by January 30, 
1976, so that we may realize their full benefit in the consid- 
eration of major legislation affecting the Food Stamp Program. 
Please address your returns to: 

Mr. David L. Wright 

House Committee on Agriculture 

1301 Longworth House Office Building 

Washington, D.C. 20515 



If you have any questions, please contact Mr. Wright 
directly at telephone number 202-225-2171. Thank you very 
much for the contribution of your State to this important 
study . 

Sincerely , 



TSFrdlw: jc 



Thomas S. Foley 
Chairman 



455 



STATE FXJ OD STAMP J3 1AI.T TY O0fflT<O I. QUfiSTK WMA.1 }<E 

An important feature of the Conniittee's food stamp study involve 
a general investigation of the Quality Control process and the detailed 
analysis of a sample of state and local Quality Control findings. We 
would appreciate your state's responses to the questions listed below in 
order (1) to assist us in making optimum use of the Quality Control 
reviews for the month of April, 1975; (2) to enhance our perspective 
with respect to the general value and potential of Quality Control as a 
mechanism for the identification and correction of Food Stamp program 
errors; and (3) to obtain your views as to the potential long term use 
of Quality Control review data to establish a comprehensive data base 
for the analysis of caseload, cost and recipient characteristics. 

Directioi .s- Please respond on the basis of the operation of the 
program in the geographic area for which you are responsible. 

A number of questions provide you the opportunity to explain your 
answer and to make recormvendations for changes. If additional space is 
needed, please attach additional pages and identify by number the questions 
being answered. These explanations and recorrmendations will be given 
very careful consideration. 

Respondent Informatio n 

Name: 
Title: 
Office: 
7v\dress: 
Telephone : 



456 



Were all of Lhe project areas in your state included in the universe for 
Quality Control sample selection for the entire 6-month period ending 
June 30, 1975? Yes No . 

If "no", please provide the following inforrmtion: 

a. Total number of project areas not included for the 6-month 
period ending June 30, 1975 ? 

b. Total number of project areas not included for the month 
of April 1975 ? 

c. Total nonpublic assistance caseload of the project areas 
not included, for the months of 

1) April 1975: Persons Households . 

2) June 1975: Persons Households 



Is there a special unit(s) in your state which is/was assigned the responsibility 
for conducting food stamp Quality Control reviews for the 6-month period ending 
June 30, 1975? Yes No . 

If "yes", 

a. Where is it (are they) organizationally located? 

b. How many full time equivalent positions are/were devoted 
to food stamp Quality Control reviews for the 6-month 
period ending June 30, 1975: 

1) State level . 

2) Local level . 

If "no", 

a. How are/were Quality Control reviews performed in your 
state for this period: 



b. Approximately how many full time equivalent positions are/were 
devoted to food stamp Quality Control reviews for this period? 

1) State level . 

2) Local level 



c. Please list any other organizational responsibilities normally 
given Quality Control review staff in your state: 

1) State level: 



2) Local level: 



457 



-3- 

3. Please summarize the minimum qualifications used in your state for the 
selection of: 

a. Food stanp eligibility (certification) workers: 



b. Food stamp Quality Control reviewers: 



4. Please describe any training given in your state for: 

a. Food stamp eligibility (certification) workers: 



b. Food stamp Quality Control reviewers: 



5. Does your state plan to expand the number of staff or otherwise modify 
the food stamp Quality Control process during the next six months? 

Yes No Undecided 



If "yes", please explain briefly. 



6. In your opinion, does the food stamp Quality Control process provide 
an accurate indication of the level of program errors in your state: 

Yes No . 

If "no", please specify reasons and ideas you may have for their remedy: 



7. In your opinion, does the food stamp Quality Control process provide 
any indication of the degree to which illegal program abuse occurs 
in your state? Yes N o 

If "yes", please explain: 



8. Please identify and c.onment upon any of the following administrative problems 
which a fleet the Quality Control process in your state: 

f~~J Inclusion of technical and procedural errors in calculating 
overall error rates. 

Comment: 

/_/ Inclusion of recipient errors in calculating overall error rates. 
Comment: 



458 



-4- 

f~J Inconsistencies betweeui Quality Control procedures and other 
Food Stamp program rules. 

Comment: 

f2/ Federal Quality Control tolerance levels. 
Comnent: 

f~J Sample selection and other statistical validity problems. 
Comment: 

/ J Staffing or organizational problems at the state or local level. 
Comment: 

/_/ Other problems. 
Comment: 

9. When food stamp program errors are identified, are any steps taken to 
ensure corrective action? Yes No . 

If "yes", 

a. Please list the major steps for correcting individual household errors 

b. Please summarize the major steps in making system improvements 
based on Quality Control findings: 

c. Does your state have a mechanism for reviewing the effectiveness 
of food stamp program corrective actions? Yes No 

If "yes", please explain: 

10. Loes the food stamp Quality Control process now provide a meaningful data base 
for caseload, cost and recipient characteristics for your state? Yes No 

If "no" , please list specific reasons and any ideas you may have for their 
remedy. 



459 



-5- 



11. For the purposes of analyzing cost, caseload and recipient characteristics, 
was the month of April, 1975, reflective of normal conditions in your state 
(e.g., natural disasters, strikes, unemployment, etc.)? 

If "no", please explain: 



12. In addition to measuring program errors, do you believe the 

Quality Control process should be expanded to provide the federal, state 
and local levels of government with an integrated data base on cost, case- 
load and recipient characteristics? 

Yes /_/ within 1 year, /_/ within 2 years, 

/_/ within 5 years 

No 

If "yes", please indicate any special needs, concerns or recommendations 
you may have in this regard: 



If "no", please describe your reasons: 



13. Please provide any suggestions or comments with respect to the operation and 
improvement of the food stamp Quality Control and Corrective Action efforts 
at the federal level: 



14. Please provide any additional comments on the food stamp Quality Control 
process you may desire: 



75-969 O - 76 - 30 



460 



461 

SURVEY OF STATE ADMINISTRATORS 
THE FOOD STAMP QUALITY CONTROL PROCESS 

HOUSE COMMITTEE ON AGRICULTURE — MAY 6, 1976 

The food stamp Quality Control process is administered 
by the Department of Agriculture through State and local wel- 
fare agencies. Modeled after the Department of Health, Edu- 
cation and Welfare's system for monitoring AFDC program errors 
the purpose of the food stamp Quality Control process is to 
measure the extent to which households receiving food stamps 
are eligible; are certified for a purchase requirement in the 
proper amount; and are certified for the total food stamps 
to which they are entitled. In order to accomplish this 
purpose, a sample of non-public assistance cases is selected 
in each state (including Guam, Puerto Rico, the Virgin Islands 
and the District of Columbia) , for which eligibility and 
benefit levels are verified. Beginning in July 1976, the 
food stamp Quality Control sample also will include public 
assistance food stamp cases. The Department of Agriculture 
publishes error findings on a semi-annual basis, based on 
summary reports submitted by the States. 

In the completion of Quality Control reviews, a great 
deal of data is collected by State and local agencies on the 



462 



-2- 

characteristics of participating households, such as house- 
hold composition, income, deductions, etc. On this basis, 
the Committee conducted a study, entitled "Characteristics 
of the Non-Public Assistance Caseload" (dated March 12, 1976), 
which analyzes Quality Control review forms for the month of 
April 1975 to develop a profile of recipient characteristics. 
A major purpose of the questionnaire survey reported in this 
paper was to obtain State views on the degree to which Quality 
Control provides an adequate data base for the analysis of 
recipient characteristics. Along these lines, the States also 
were asked to provide their views as to whether the Quality 
Control process should be modified to accomodate such analyses 
on an ongoing basis. 

A second objective of this questionnaire survey was to 
determine the degree to which State and local administrators 
feel the Quality Control process accurately reflects the 
level of errors in the Food Stamp program. According to the 
most recent Department of Agriculture report, covering the 
period July to December 1975, 46.6% of all non-public assistance 
cases contain at least one error, and one bonus dollar in 
four is misspent. However, based on the Committee's "Survey 
of State and Local Administrators" (dated February 25, 1976), 
there is some concern that Quality Control policies and pro- 
cedures may distort the "true" Food Stamp program error rate. 



463 



-3- 

The issue of illegal program abuse has been discussed 
widely in the context of the Food Stamp program. Yet, de- 
finitive statistics have been lacking on the actual level of 
illegal program abuse. A special study by Committee staff 
now is underway on this issue. However, a third objective 
of the Quality Control questionnaire survey was to supplement 
this study by determining whether State administrators feel 
the Quality Control process provides any indication of the 
level of illegal program abuse. 

Questionnaires were sent to all of the States plus the 
District of Columbia, Guam, Puerto Rico and the Virgin Islands 
(hereafter referred to as "States"). Responses were not 
received from Alabama, Oregon, South Dakota, Utah, and the 
Virgin Islands. The 49 returned questionnaires (representing 
a 91% questionnaire response rate, and a 96% response rate 
based on the portion of the April 1975 Food Stamp caseload 
represented by the participating States) were analyzed by Com- 
mittee staff. The results are summarized as follows: 



464 



-4- 

General Factors Related to the Operation of the Food Stamp 
Control Process 

Questions 1, 2, 3, 4, 5 and 9 of the Committee Survey 
focused upon the operational aspects of the Food Stamp Quality 
Control process at the State and local levels. The objectives 
of these questions were (1) to gather general background in- 
formation on Quality Control to supplement an earlier question- 
naire sent to State and local food stamp administrators, the 
results of which were submitted to the Committee on February 
25, 1976; and (2) to obtain numerical data to assist the Com- 
mittee in interpreting its study, entitled "Characteristics 
of the Non-Public Assistance Caseload" (submitted to the Com- 
mittee on March 12, 1976), which was based on information de- 
rived from the April 1975 Quality Control review sample. 

Question 1 asked whether all of the State's Food Stamp 
project areas were included in the universe for Quality Control 
sample selections for the January to June 1975 review period. 
Forty-five of the forty-nine states, or 92%, answered "yes". 
Of the four states answering "no" to this question, only one 
reported that none of its project areas were included in the 
sample for the month of April 1975; and, of the remaining 
three states, 49 of 91 — or 54% — of the project areas were 
not included in the April 1975 sample. On a national caseload 
basis, these results indicate that about 93% of the non-public 



465 



-5- 

assistance households were included in the Quality Control 
sampling universe for the month of April 1975. However, as 
indicated by the results of questions 6, 8, and 11 of the 
survey, some States experienced difficulty completing case 
reviews within the samples extracted from this universe. 

Question 2 asked whether special units within the States 
were assigned the responsibility for conducting Quality Control 
reviews for the six-month period ending June 30, 197 5. Forty- 
six of the forty-nine States who responded to this question -- 
or 94% — answered "yes". Ten reported that the Quality 
Control unit reported either directly to the head of the 
State agency or to one of his principal assistants. However, 
this probably is an understatement of the number of States in 
which the unit responsible for food stamp Quality Control is 
at an organizationally prominent level, as fifteen States did 
not appear to understand this part of the question (e.g., seven 
gave addresses and eight did not respond) , and the remaining 
twenty-one States repoted the name of the next higher unit 
without relating its organizational location with respect 
to the agency head. Also, the forty-six States answering 
"yes" to question 2 reported a total of 768 positions (persons) 
devoted to the Food Stamp Quality Control process. This 
represents an average of roughly seventeen food stamp Quality 



466 

-6- 



Control staff positions per State, with the greatest number 
reported for a single State being 45, and the least number 
being 2. Due to the extreme food stamp caseload fluctuations 
between States, personnel requirements vary substantially 
and raise questions as to the meaning of the average posi- 
tions figure. Eighty-six percent of the total staff mentioned 
in reference to this part of Question 2 was organizationally 
located at the State level (including regional offices) . 

Of the three States who answered "no" to Question 2, one 
reported that Quality Control reviews were handled totally 
by the local agencies, and the remaining two states responded 
that AFDC Quality Control staff also performed the reviews 
for the Food Stamp Program. A total of 91 positions were 
devoted in these States to Food Stamp Quality Control reviews: 
13 at the State level and 78 (all from one State) at the local 
level. It should be noted that it was not possible to deter- 
mine from the questionnaire how many of the States answering 
"yes" to Question 2 gave their reviewers both AFDC and food 
stamp cases. 

In Question 3 the States were asked to summarize the 
minimum qualifications for food stamp eligibility (certifi- 
cation) workers and food stamp Quality Control reviewers. 
For the eligibility workers, 17 States required at least two 
years of college, with 10 of these States requiring a four- 



467 

-7- 



year college degree. However, in almost every State pre- 
vious work experience could be substituted for all or part 
of the education requirement. Most of the remaining States 
required a high school education in combination with special 
skills (e.g., knowledge of Food Stamp Program rules, typing, 
interviewing, etc.) and/or previous work experience, and 
successful completion of a Civil Service examination. One 
State allowed status as a current or potential welfare recipient 
to be substituted for the education requirement. 

As might be expected, minimum qualifications for Quality 
Control reviewers were higher than for certification workers. 
For example, most States required college experience; and the 
States which had college experience requirements for certi- 
fication workers generally had stiffer requirements for 
reviewers, including graduate experience in social work in 
some instances. However, the most important distinction 
for most States was in conditioning eligibility to become a 
reviewer upon previous experience of some duration (usually 
1-3 years) either as a certification worker or in an equiva- 
lent job involving the operation or analysis of public as- 
sistance programs. 

In Question 4 , the States were asked to describe any 
training given for certification workers and Quality Control 
reviewers. Six States did not respond to the portion of this 



468 

-8- 



question dealing with certification workers, probably be- 
cause of an organizational separation of the certification 
and review functions at the State level. The most common 
response involved on-the-job training, either by itself 
or in combination with a formal staff development program 
(the longest of which was 8 days) . Several States also men- 
tioned that additional training and conference sessions were 
held when significant policy changes occurred. A number 
of States also referred to periodic "refresher" courses 
for certification workers and reviewers. 

Question 5 asked whether the States planned to expand 
the number of staff or otherwise modify the Food Stamp Quality 
Control process during the next six months (January to June 
1976) . Eleven of the States were "undecided" on this question, 
with 17 responding "yes" and 21 answering "no". Fifteen 
of the States answering "yes" either were in the process of 
hiring additional staff, or planned to hire additional staff 
pending State funding approval. In 8 instances the expan- 
sion of Quality Control to include public-assistance food 
stamp cases was given as the primary reason for increased 
staff requests. Other States planned to handle the new 
public assistance cases by increasing the "case per worker" 
load of the review staff. The State referred to in Question 
2 as having its Quality Control reviews handled entirely at 



469 

-9- 



the local level for the six-month period ending June 30, 1975, 
reported that its Quality Control staff had been centralized at 
the state level effective January 1976. Another State men- 
tioned that its Quality Control unit was being organizationally 
moved so as to be "closer" to the agency head. 

In Question 9 , the States were asked whether "corrective 
action" steps were taken when program errors were identified. 
48 of 49 — or 98% — answered "yes", with one State not 
responding to this question. In almost all cases, the immediate 
corrective action consisted of notifying the local agencies 
of individual errors. However, only 8 States mentioned that 
there was a formal follow-up mechanism to ensure that the 
corrective action had been taken at the local level after 
notification; and only 5 of these States stipulated that 
individual errors had to be corrected within a specific time 
frame (i.e., 1 said "immediately", 2 said 15 days, and 3 had 
30-day limitations) . 

The States also were asked «n this question to summarize 
the major steps in making systems improvements based on Quality 
Control findings. While 7 States either did not respond or 
answered "none" to this part of the question, 15 States said 
that ongoing Corrective Action Committees were responsible 
for error analysis and system improvement measures. The most 
frequent types of State-wide corrective action measures men- 



470 

-10- 



tioned were (1) the revision and clarification of Food Stamp 
manual instructions, and (2) staff training on program rules 
where a high frequency of errors were found. 

Finally, the States were aksed in this question if they 
had a mechanism for reviewing the effectiveness of food stamp 
program corrective actions. Thirty States answered "yes", 8 
answered "no" , and 11 States did not respond to this part of 
the question. Of the States answering "yes", many referred 
to the analysis and review role of their Corrective Action 
Committees, and several also referred to the Food Stamp Ef- 
ficiency and Effectiveness Program which is mandated by 
Section 15(b) of the Food Stamp Act. Two States said that 
an evaluation mechanism was included as an integral part of 
each corrective action measure. Another State mentioned 
that most of its corrective action measures were pilot tested 
before being implemented on a statewide basis. However, the 
most common evaluation tool mentioned was a simple comparison 
of the "pre-corrective action" error rate with the hopefully 
lower "post-corrective action" error rate in the appropriate 
program area. 

Perceived Value of the Food Stamp Quality Control 
Process in the Detection of Program Errors and Illegal Program 
Abuse 

The objective of Questions 6 and 8 of the Committee Survey 



471 

-li- 



was to determine the extent to which State administrators believe 
the food stamp Quality Control process fulfills its stated 
purpose of identifying and classifying program errors as a 
management tool for program improvement. Question 7 was in- 
cluded in the Committee questionnaire to obtain the views of 
State administrators in regard to the allegations that the 
level of program errors is a reflection of the degree to 
which illegal abuse (by recipients) occurs within the Food 
Stamp program. 

In Question 6 , State administrators were asked whether, 
in their opinion, the food stamp Quality Control process pro- 
vides an accurate indication of the level of program errors 
in their State. While one State did not respond to this 
question, 30 of the 48 States who did respond — or 63% — 
answered "yes". One of the States answering "yes" clarified 
its response, saying that, "Given that the sampling scheme 
can be better implemented, the information would be accurate." 
Another State mentioned that its affirmative response was 
limited to statewide error rates; and that the sample was 
too small to obtain a reliable error rate for each project 
area. 



472 

-12- 



Of the 18 States (38%) answering "no" to Question 6, 
the most frequent reasons given were: 

(1) that the Quality Control sample is either too 
small or improperly selected (7 States) ; 

(2) that the inclusion of procedural and technical 
errors artifically inflates the overall error 
rate (6 States) ; 

(3) that contradictions between program policies and 
Quality Control procedures in some cases have the 
effect of making errors out of decisions that 
were correct at the time of certification (6 
States) ; and 

(4) that insufficient staff is available to complete 
Quality Control reviews (4 States) . 

A more comprehensive picture of the problems States feel 
exist with the Quality Control process is given by the responses 
to Question 8 , which asked the States to comment upon six 
specific problem areas, plus any others that may be applicable. 
The responses to this question are ranked according to frequency 
as follows: 



473 



-13- 



Problem Frequency of Response 

1. Federal Quality Control tolerance 

levels 43 (88%) 

2. Inclusion of technical and proce- 
dural errors in calculating overall 

error rates 41 (84%) 

3. Inclusion of recipient errors in 

calculating overall error rates 37 (76%) 

4. Inconsistencies between Quality 
Control procedures and other Food 

Stamp program rules 36 (73%) 

5. Staffing or organizationsl problems 

at the State or local levels 28 (57%) 

6. Sample Selection and other Statisti- 
cal validity problems 26 (53%) 



Fourteen States cited "other problems associated with the 
Quality Control process, although three of these responses fell 
into one of the above six categories, and have been included 
there. Of the remaining 11, five States cited difficulties 
in the internal operating procedures of the Quality Control 
process, such as coding instructions and the submission of 
schedules for sub-sample cases. Three States referred to 
relationship problems with Federal officials, such as sanction 
"threats" and a lack of responsiveness to program changes 
recommended by the States. One State mentioned duplicate 
Federal reporting requirements; one State disagreed with the 
inclusion of public assistance food stamp cases in QC sample; 
and one State called for basic reform of the Food Stamp program. 



474 



-14- 

The States were asked in Question 7 whether, in their 
opinion, the food stamp Quality Control process provides any 
indication of the degree to which illegal program abuse occurs 
in their State. 37 of the 48 States responding to this 
question — or 77% — answered "yes". However, State views 
varied as to the nature of the relationship between the error 
rate and illegal program abuse. Nine States referred to the 
classification of deliberate misrepresentations of fact by 
recipients on Federal Quality Control reports as one indica- 
tion of illegal program abuse. For example, FNS Report 247-1, 
a copy of which is submitted by the States to the Department 
of Agriculture for each six-month review period, contains 
boxes for the number of cases in the sample in which there 
was a misrepresentation of facts, the number of cases under 
investigation for fraud, and the number of cases in which 
the Quality Control review was not completed because recipients 
were unwilling to cooperate. 

A few of the States responding to the Committee question- 
naire felt that there was a well-defined numerical relationship 
between the error rate and the degree of illegal abuse. For 
example, one State responded that "During the January through 
June 1975 reporting period, deliberate and willful misinter- 
pretations were indicated in 10.6% of the cases we reviewed. 



475 



-15- 
Th is means that in 10.6% of the cases the client either gave 
the agency incorrect or incomplete information or failed to 
report some information which affected his eligibility." 
Another State responded that "Based on the Quality Control 
finding period ending June 1976, 20% of / the_/ cases reviewed 
were found to have misrepresentation of the facts." 

Other States did not report numerical figures, but none- 
theless felt that Quality Control statistics provided an 
indication of illegal recipient abuse. For instance, one 
State responded that "Because Quality Control performs a 
100% verification two to three months after the review date, 
it is able to detect substantial abuse, especially misreporting 
and failure to report by clients. Also, for some reason, 
clients are more prone to divulge information to reviewers 
than workers." Another State said that "Obviously, at a 63% 
recipient error rate there are both innocent and deliberate 
abuses of the program." A third State responded that "The 
-finding of eligibility with misrepresentation is found by 
QC reviewers and is a good indication in several cases of 
program abuse." One State even reported uncovering a "wide- 
spread fraud ring in a large metropolitan area" through the 
Quality Control process. 



75-969 O - 76 - 31 



476 



-16- 

A few States were careful to point out that the error 
rate provides an indication of recipient fraud, but is not 
designed or intended to monitor bank practices, the misuse of 
stamps, grocer violations, or employee illegal activities. A 
number of States also were careful to point out the tentative- 
ness of Quality Control findings. For example, one State 
responded that "The QC system certainly gives an accurate 
upper limit of illegal program abuse in that the reviewers 
are to provide us with their opinion as to whether or not any 
error was the result of intentional misrepresentation of facts 
by the client, their instruction being to so indicate if there 
is any indication." Another State reported that "some allowance 
must be made for the fact that it is the reviewer's personal 
feelings that determines whether illegal program abuse exists." 
A third State replied that "the indication was very 'slight'. 
Specificity regarding 'program policy 1 errors would facilitate 
the use of QC findings as such an indication." 

Usefulness and Potential of the Food Stamp Quality Control Process 
as a Program Data Base 

Questions 10 and 11 were aimed at determining whether the 
States felt the Quality Control process provided a meaningful 



477 



-17- 

data base for the Food Stamp program, to assist in inter- 
preting the Committee's data analysis of quality Control 
review forms for the month of April 1975. Question 12 pro- 
vided the added dimension of "future potential" of the Food 
Stamp Quality Control process as a program data base, to 
determine the extent to which the States felt the type of 
data analysis now being performed by the Committee might 
serve as a useful management tool on an ongoing basis. 

Question 10 asked the States whether they felt the 
food stamp Quality Control process now provides a meaningful 
data base for caseload, cost and recipient characteristics 
for their States. The responses to this question were approxi- 
mately evenly split, with 24 States answering "yes", 22 
answering "no", and 3 States not responding. However, 3 
of the States answering "no" questioned only the retriev- 
ability of the data as their computer systems are not now 
set up to process Quality Control data in this way, and 2 
States felt that the Quality Control data did provide an 



478 

-18- 



accurate indication of recipient characteristics. Seven 
States suggested that the Quality Control process could be 
modified to accommodate characteristics data through revision 
of the reporting forms and the addition of more detailed 
reporting requirements. Seven States questioned the validity 
of the sample size, and five States responded that they 
were unable to complete Quality Control samples (usually 
due to staffing problems) . Three States did not feel that 
gathering recipient characteristics was a valid purpose 
of the Quality Control process, and suggested that this 
purpose would be served better through other means, such 
as special surveys. 

Of the States replying "yes" to Question 10, only three 
provided additional comment. One State mentioned the retriev- 
ability problem due to the lack of existing computer software. 
The second State referred to a lack of feasibility because 



479 

-19- 



of decentralization of Food Stamp program management and 
administration in that State. And the third State responded 
that the Quality Control process cannot identify the partici- 
pation of special groups such as strikers, students and the 
military . 

In Question 11 , the States were asked whether the month 
of April 1975 was reflective of normal conditions in the 
State for the purpose of analyzing caseload, cost and 
recipient characteristics. Seven of the States either did 
not understand the question or did not respond. However, of 
the remaining 42 States, 34 — or 81% — answered "yes" to this 
question. Two of the States answering "yes", however, noted 
high unemployment levels. And of the 8 States answering "no", 
5 cited high unemployment or the recession as the reason 
April 1975 was not a representative month. Also, of the 
States answering "no", one cited that 3 of its counties were 
under emergency declaration because of flooding, and that the 
coast counties had not recovered from a shipping strike. The 
other two States answering "no" to Question 11 also cited strike 
activity as the major reason. According to one of the States, 
"A major aerospace industrial complex in our largest metro- 
politan area was on strike during the month of April 1975, 
inflating our active caseload by almost 8% statewide." The 



480 

-20- 



other State responded that " (based on) a review of the number 
of food stamp cases under care, the number of households 
participating and the amount of total food stamp coupons 
issued for 1975 indicates that 4/75 was the highest month in 
the year in all 3 categories. There was a strike in the 
Southwest region of (name of State) during 4/75 and this would 
have contributed to the increase during that month." 

In Question 12 , the States were asked whether the Quality 
Control process should be expanded to provide the Federal, 
State and local levels of government with an integrated data 
base on cost, caseload and recipient characteristics. Three 
States did not repsond to this question; and of the States 
who did respond, 26 of 46 — or a little more than half — 
answered "yes". Of the States answering "yes", 7 felt the 
necessary changes should be made within one year, 10 within 
two years, 7 within 5 years, and 2 States expressed no 
preference as to implementation timing. Also, of the States 
answering "yes", 6 expressed concern over the need for addi- 
tional staff resources, and 3 States questioned the general 
feasibility of such a system. The most common benefit cited 
by the States answering "yes" to Question 12 was the potential 
for developing a profile of food stamp recipient characteristics 
(5 States). However, one State also cited potential benefits 
in estimating the impact of program policy changes on the food 
stamp caseload. 



481 



-21- 

Of the 20 States who answered "no" to Question 12, 9 
felt that using the Quality Control process as a general 
program data base would distort the purpose of Quality 
Control and/or would be too costly. One State responded, 
for example, that the Food Stamp Program already is over- 
regulated. Another State referred to a lack of staff in 
carrying out present Quality Control functions. A third 
State responded that "Quality Control is not cost effective, 
(and) has been used more as a policing action than an admin- 
istrative management tool, with sanction threats." Seven 
of the States answering "no" to Question 12 responded that 
other, less costly, methods exist for obtaining recipient 
characteristics data (e.g., the characteristics survey 
mentodology which now is used for the AFDC program) . Three 
States responded that the Quality Control process performs a 
adequate characteristics data function now. And one State 
replied that "The Food Stamp Program does not have a rehabil 
tation component as (does) public assistance. Therefore, 
recipient characteristics and caseload (are) not as relevant 
Other than 50% of the administrative cost, the full cost 
is born by the Federal Government." 



482 



-22- 

General Comments on the Operation and Improvement of the Food 
Stamp Quality Control Process 

The last two questions — 13 and 14--were quite open-ended; 
and were intended to provide the States with an opportunity 
to comment upon any subjects or issues related to Quality 
Control which were not adequately covered in other parts of the 
questionnaire. The staff analysis of these questions revealed 
that State responses largely were duplicative or earlier 
questions, and that the answers given in Question 14 tended 
to either restate or extend the responses for Question 13. 
Therefore, responses to the two questions have been merged 
for the purposes of this paper. Following is a discussion 
of the four categories of supplementary comments which were 
received with some frequency. 

1. 23 of the 49 States — or 47% — cited additional concerns 
with the design or structure of the Food Stamp Quality Control 
process. Both the intensity and specificity of the concerns 
varied significantly among the States. For example, a number 
of States called for relatively straightforward modifications 
of the existing Quality Control process, among which were 
upgrading staff efficiency in the review, analysis and 
evaluation processes so that data could be better utilized 
in program planning and the reduction of errors; revision 



483 



-23- 

of Form FNS 247 to enhance its clarity; timing the implementa- 
tion of program changes to coincide with the beginning of 
Quality Control review periods; increasing the $25 limitation 
allowed on review-certification discrepancies for households 
with widely fluctuating income; implementing a Federal correc- 
tive actions program to accompany Quality Control; and replacing 
Quality Control with the Efficiency and Effectiveness program. 
However, other States questioned the basic purpose of Quality 
Control, saying such things as "quality control funds should 
be used for eligibility workers, supervisors and training. 
After all, what we are concerned with is program integrity and 
to have that, the above must be available." 

2. 17 of the 49 States — or 35% — cited problems in their 
relationships with the Federal Government. Some States referred 
to general difficulties with the Federal Government, or to 
difficulties with agencies other than the Department of Agri- 
culture (e.g., in obtaining data from the Social Security 
Administration) . However, most of the comments were directed 
at the Department of Agriculture. One State commented, for 
example, that "No response is ever received from the Federal 
Quality Control Unit to the State Program Development level. 
Therefore, if we have no communications the program is not 
effective nor worthwhile. Its purpose is defeated." 



484 



-24- 

A number of States pointed to a lack of flexibility 
by Federal officials in the area of program change, saying, 
for example, that "the Feds, appear to be a stone wall against 
which all meaningful comments on change and improvements 
have no effect"; and "the Federal level should respond to 
definite State findings, rather than ignore them as has been 
the case in the past." Three States responded that Federal 
Quality Control sanctions were a punitive approach which would 
undermine the purpose of the Quality Control process. According 
to one State, "If QC findings are used as a form of punishment/ 
it will result in unrealistic and ineffective statistics being 
generated for the purpose of showing good performance rather 
than areas for improvement." 

3. 15 of the 49 States — or 31% — responded that Quality 
Control error findings indicated the need for basic reform of 
the Food Stamp program. Nine States cited the need for simplifi- 
cation of program rules and procedures; 3 States called for 
the implementation of a standard deduction; 2 States recommended 
monthly verification of recipient income; 2 States suggested 
retrospective accounting; and 2 States indicated that the work 
registration requirement should be modified (i.e., one State 
said that the maximum registration age should be 55, and the 
other State thought that the requirement should be waived in 



485 



-25- 

areas where there are no job opportunities) . Two States also 
called for comprehensive reform of the welfare system. One 
State responded flatly, for example, that "the Food Stamp 
program should be cashed out"; and the other State commented 
that the number of Federal aid programs should be reduced, and 
the food stamp program should be merged with public assistance. 

4. 3 of the 49 States — or 6% — called for increased 
Federal funding of the Food Stamp program. 



486 



487 



APPENDIX VIII 

Illegal Activities in the Food Stamp Program 
■ — The Federal Perspective 



488 



489 



« DC LA OAKZA. TEX 
JOSEPH P. VMMNITO, PA. 
WALTVP. ■. JOKES, NX. 



r TMOR^ON, > 



£ouae of afcepreaentatitiei* 

Committee on Agriculture 

Room 1301. longtoorib frrast €>Uut JBuilbins 

JBa siting ton, B.C. 20515 
May 12, 1976 

TO: Members, House Agriculture Committee 

FROM: Thomas S. Foley, Chairman 

SUBJECT: Illegal Activities in the Food 
Stamp program — the Federal 
Perspective 



The attached staff paper addresses the issue of illegal 
activities in the Food Stamp program from the Federal perspec- 
tive. This paper represents the first of a two-part study. 
Illegal activities in the Food Stamp program from the perspec- 
tive of State agencies will be considered in the second part of 
the paper, which will report the results of a special question- 
naire that was sent to all fifty States plus the District of 
Columbia, Guam, Puerto Rico and the Virgin Islands. 

This paper focuses on providing information regarding: 

1. Violations and penalties, as well as administrative 
recourse available to food stamp administrators in 
handling cases of suspected violations. 

2. Key Federal agencies and offices involved in the 
monitor and control of illegal activities. 

3. Statistics on food stamp violations. 

4. Aspects of certain working procedures used in the 
detection of violations , which provide perspective 
on current statistics. 

Sources of information for the paper were drawn from 
materials supplied by various offices and agencies involved in 
maintaining the integrity of the Food Stamp program, correspon- 
dence and discussions between the staff and various office and 
agency personnel, and records of Congressional hearings. 



490 



491 

SUMMARY 

ILLEGAL ACTIVITIES IN THE FOOD STAMP 
PROGRAM 
THE FEDERAL PERSPECTIVE 

Violations and Penalties 

Section 14 of the Food Stamp Act of 1964, as amended, defines 
violations and penalties for the perpetration of such illegal acts 
against the food stamp program. 

It is illegal to knowingly use, transfer, acquire, alter, or 
possess coupons or authroization to purchase cards (ATP) in any 
manner unauthorized by the Food Stamp Act of 1964, as amended, and 
its regulations, or to present or cause to be presented coupons 
for payment or redemption knowing they have been received, trans- 
ferred, or used in any manner in violation of the Act or its reg- 
ulations. Such violations involving coupons or ATP cards with a 
value of $100 or more constitute a felony and upon conviction carry 
a maximum fine of $10,000 and/or a maximum prison sentence of five 
years. Violations involving coupons or ATP cards with a value of 
$100 or less constitute a misdemeanor and upon conviction carry 
a maximum fine of $5,000 and/or a maximum prison sentence of one 
year . 

Regulations issued pursuant to the Food Stamp Act of 1964, 
as amended, also provide that any person who knowingly makes false 
statements in the food stamp application or certification process, 
or fails to report changes in income, affecting participation in 



75-969 O - 76 - 32 



492 

Page 2 



the food stamp program, may be subject to criminal prosecution or 
civil liability under any applicable federal or state laws. 

Food coupons are deemed obligations of the United States within 
the meaning of 18 U.S.C. 8. Provisions relative to counterfeiting 
and the alteration of obligations, etc., are applicable to food 
coupons. 

Federal Organization 

The Federal Government has primary responsibility for handling 
suspected cases of gross negligence by a state agency; certifying 
and issuance office employee fraud; trafficking; violations by firms 
authorized to accept food coupons; counterfeiting; and thefts of 
cash, coupons, and ATP cards from issuance offices located in banks 
and post offices. 

With respect to recipient violations, the Food and Nutrition 
Service issues pertinent guidelines, regulations and instructions, 
and must concur in the determination by a State agency that recipi- 
ent fraud and/or misrepresentation has occurred before any action 
may be initiated to recover federal funds. However, because the 
State agencies are responsible for interviewing and certifying food 
stamp applicants, they bear the primary responsibility for the 
monitoring and handling of recipient violations. 



493 



Page 3 

A number of agencies and offices at the federal level may be- 
come involved in various phases of food stamp security in handling 
cases of suspected violations: the Food and Nutrition Service (FNS) , 
the Office of Investigations (01), the Office of Audit (OA), and 
the office of the General Counsel (OGC) — all within the Department 
of Agriculture; the U. S. Postal Service; the U. S. Secret Service; 
Federal Reserve Banks and the Department of Justice. 

Statistics on Food Stamp Violations 

There is no overall coordinated data collection system on il- 
legal activities in the food stamp program, and statistics should 
be viewed cautiously. At the federal level, the multiplicity of 
agencies and offices which may become involved in dealing with 
suspected violations yield variations in reporting methods, thus 
making "across-the-board" comparisons of cases and figures difficult. 
In addition, it is not unusual for statistics on reported cases 
for previous reporting periods to rise, or fall, as late reports 
are made, backlogs are processed, new cases uncovered; or new 
evidence developed which changes the character of a case. 

For the last full fiscal year — 1975 — the Food and Nutri- 
tion Service reported the following totals for major categories 
of violations: 



494 

Page 4 



Counterfeiting 

In FY 1975, $835,195 worth of counterfeit coupons was seized 
by the Secret Service. The Federal Reserve Banks statistically 
sample coupons coming back through the Reserve system for genuine- 
ness. However, the Secret Service reports few counterfeits get 
beyond the retail store or local bank levels because of their poor 
quality overall. In the history of the present food stamp program, 
less than 1.5 percent of the total $2.3 million ever seized in 
counterfeit food coupons, or $29,190, was found in circulation. 

Thefts 

In FY 1975, FNS reported 62 instances of thefts of food coupons 
with a total value of $572,000. In addition, three bulk shipments 
of coupons, valued at $50,000 were lost in transit. 

Gross Negligence by State Agencies 

Since 1970, charges of gross negligence have been made on nine 
occasions against seven States and the District of Columbia. Pro- 
jected dollar losses to the Federal Government as a result of gross 
negligence totaled $1.7 million. Types of situations which eventu- 
ally formed basis for the charges included such things as disregard 
of program regulations, failure to correct irregularities, inadequate 



495 



Page 5 

program security, overissuances of bonus coupons; and multiple certi- 
fication and issuance errors. 

Certifying and Issuance Office Employee Fraud 

Statistics for both FY 1974 and 1975 on this category of food 
stamp violations are incomplete. Figures for both years indicate 
a total 53 instances of violations detected in 19 States and the 
District of Columbia. Total losses have not yet been determined, 
but known losses exceed $556,000. 

Retailer-Wholesaler Violations 

FNS reports in FY 1975, out of 2,834 investigations of cases 
of suspected violations by firms authorized to accept food coupons, 
1,452 indicated evidence of violations. 

A total of 746 stores were disqualified from participation 
in the food stamp program, in FY 1975, for periods ranging from 
30 days to 3 years. Over 500 of the stores received disqualifica- 
tions in the six months to one year range. 

Another 730 stores were strongly suspected of violations on 
the basis of investigations, but were not disqualified from parti- 
cipation in the program. 

The Food and Nutrition Service referred 666 cases of suspected 



496 

Page 6 



violations to the Department of Justice for prosecution. Prosecu- 
tion was declined for 499 of the 666 cases. There were 147 "suc- 
cessful" prosecutions. 

Recipient Violations 

The Food and Nutrition Service reports that it undertook col- 
lection action in FY 1975 against 34,463 food stamp recipients for 
claims of food coupons overissuances valued at $6.3 million. An 
additional $800,500 in claims against 2,984 recipients, which was 
reported to FNS, was deemed uncollec table. 

FNS states the majority of overissuances was due to cases 
of fraud or deliberate misrepresentation of fact by the household. 
Specific figures are unavailable. 

Trafficking 

There are no specific figures on trafficking per se. Statistics 
are elusive, primarily because offices and agencies interpret the 
term differently. Some offices consider it a motive for the per- 
petration of violations such as thefts or embezzlement, rather than 
an actual category of violation, except wheie individuals are caught 
in the act of trafficking itself. Other offices consider all viola- 
tions possible trafficking cases if the coupons or ATP cards involved 



497 



Page 7 

have or would likely find their way into trafficking channels, had 
the violation gone undetected. 

Conclusions 

Whatever the actual levels of illegal activities in the food 
stamp program, it seems unlikely statistics used by federal food 
stamp administrators for several of the major categories of vio- 
lations are accurate. 

Aside from the random detection of violations through reports 
or complaints from outside sources , food stamp administrators are 
heavily dependent upon certain working procedures for the identi- 
fication of possible violations. 

The admitted failure of the FNS to adequately administer the 
food stamp accountability system, and recent findings concerning 
irregularities in the handling and redemption of cash collections 
for food stamp sales by food stamp issuing agents, immediately throws 
the security of food stamp funds, coupons and ATP cards into ques- 
tion, as well as statistics on coupon losses, retailer compliance 
and certifying and issuance personnel fraud. 

Present policies with respect to investigations of retail food 
stores suspected of violations have exacerbated the problems of 
retailer compliance. A quota presently exists on the number of 



498 



Page 8 



investigations which the Office of Investigations can undertake. 
Since the implementation of the quota in October of 1975, a back- 
log of approximately 3,000 to 4,000 retailer cases has been created. 
The full impact of the quota as well as the mobilization of 01 
personnel to work on the "vender scandel" is difficult to predict 
since FNS has advised its field personnel to limit their requests 
for investigations. At this time, FNS officials state they have 
been given no definite indication of how long the present situation 
might continue. 

Only one nationwide, random "no advance warning" direct samp- 
ling of retail food store compliance has ever been made. In 1969, 
USDA officials conducted a random sampling of retail food stores 
in the 12 largest metropolitan areas served by the food stamp pro- 
gram at that time. The areas encompassed included stores which 
served 26,5 percent of all food stamp recipients and accounted for 
over 30 percent of the total of all food stamps issued. 

The sample revealed that 44 percent of the stores tested sold 
ineligible items in exchange for food coupons and another 12 per- 
cent committed administrative violations such as giving cash in 
change or overcharging. 

In the seven years since the sampling was made, changes in 
the retailer enforcement effort have been made, but since there 



499 

Page 9 

has been no comparable sample made subsequently, a "before and after" 
comparison of retailer compliance is not available. 

With respect to recipient violations, it is unlikely federal 
authorities have accurate statistics, primarily because they have 
little or no idea of what each state agency employs in the way of 
a working procedure to identify possible violations. The results 
of a procedure known as "claims review determination" are utilized 
by federal food stamp administrators to indicate levels of recipient 
fraud or deliberate misrepresentation, but the Food and Nutrition 
Service does not mandate the consistent nationwide use of any 
specific procedure to identify such cases. 

In addition, clearcut federal definitions between "misrepre- 
sentation" and "misunderstanding" are lacking, and the initial 
assessment of whether or not deliberate misrepresentation or fraud 
might be involved in a recipient case hinges on the perceptive 
talents of the individual food stamp caseworker. 

Finally, in testimony before the Agriculture Committee earlier 
in the year, a USDA official openly stated the Department of Agri- 
culture does not have reliable statistics on violations by food 
stamp recipients or retailers, and USDA does not know what the rates 
of fraud are exactly. 



V 

500 



501 



REPORT ON ILLEGAL ACTIVITIES IN THE FOOD STAMP PROGRAM 
THE FEDERAL PERSPECTIVE 

This segment of the staff study of the food stamp program addresses the 
problem of illegal activities. The purpose of this paper is to provide infor- 
mation regarding illegal activities by focusing on: 

1) provisions of the Food Stamp Act of 1964, as amended, and its regula- 
tions which define violations of the program as well as penalties for the 
perpetration of such violations; and administrative recourse available to 
the Food and Nutrition Service, including the assessment of financial 
liability in the event there is a loss of federal funds, food coupons or 
authorization to purchase cards (ATP); 

2) key federal and state offices and agencies which are involved in handling 
cases of suspected violations, either through their detection, investigation, 
or disposition; 

3) general categories of illegal activities commonly utilized by state and 
federal agencies in the compilation of data on program abuse, including 
statistics on such violations; and 

4) aspects of some work methods related to the detection of violations 
which provide perspective on current statistics and FNS efforts. 

The protection of the food stamp program from abuse is a responsibility of 
both federal and state-level offices and agencies, but no centralized or 
coordinated system of data collection on illegal activities overall exists. 
Although there have been periodic flurries of press articles on illegal activities, 
most often highlighting individual cases of program violations or specific kinds 
of abuse, bibliographic reference guides on food stamps provided by the Library 
of Congress, for example, reveal publication of substantive papers or articles 
dealing with illegal activities are infrequent. Of approximately 140 bibliographic 
citations noted for food stamps by the Library of Congress over the past ten years 
less than half a dozen dealt with illegal activities either in part or in whole. 



502 



- 2 - 

Sources of information for this study were drawn from materials supplied 
by various offices and agencies involved in maintaining the Integrity of the 
food stamp program, correspondence and discussions between staff and various 
office and agency personnel, records of a number of congressional hearings, 
and a nationwide questionnaire on illegal activities distributed to the 
Directors of Departments of Social Services in the fifty States, the District 
of Columbia, Guam, the Virgin Islands, and Puerto Rico. 

The size and diverse elements of the food stamp system which must be 
monitored and protected from violations are amply demonstrated by a brief 
review of the basic physical dimensions of the program: By the end of 
calendar year 1975, there were 3,046 food stamp project areas in the United 
States, Guam, Puerto Rico, and the Virgin Islands, serving food stamp recipients 
Participation in the program fluctuated during the year, and reached its high 
point i n April when some 19.4 million recipients were on the food 

stamp rolls. 

During the year, approximately $10 billion in food stamp coupons was 
transported to 3,695 shipping or storage points for distribution to 14, 254 
issuing agents , authorized to sell coupons to eligible recipients. Issuing 
agents Included government welfare offices, chartered financial institutions, 
post offices and other agents such as community organizations, city clerks, 
and other stores. 

Firms authorized to accept food coupons in exchange for eligible food 
during 1975, totaled 245,105 retail food stores , 4,220 wholesale food concerns , 
and 6,939 "prepared meal services ," comprised of nonprofit meal delivery 
services, communal dining facilities for the elderly, drug addiction treatment 
programs and alcoholic treatment programs. 



503 



- 3 - 

Federal and state level offices or agencies may often exchange informa- 
tion or work jointly in handling suspected violations, but one of the other 
level usually bears the primary responsibility for the detection, investiga- 
tion and/or disposition of a case, depending upon the type of violation and 
where it was committed. For this reason and to facilitate a more orderly and 
succinct presentation, this paper discusses the federal and state roles 
separately. 

The Federal Role . __ Violations and penalties . 

Federal law and regulations define violations and penalties for the perpetra- 
tion of such illegal acts against the food stamp program. 

Section 14 of the Food Stamp Act of 1964, as amended, states: 
"(b) Whoever knowingly uses, transfers, acquires, alters, or possesses 
coupons or authorization to purchase cards in any manner not authorized by 
this Act or the regulations issued pursuant to this Act shall, if such coupons 
or authorization to purchase cards are of the value of $100 or more, be guilty 
of a felony and shall, upon conviction thereof, be fined not more than $10,000 
or imprisoned for not more than five years or both or, if such coupons or 
authorization to purchase cards are of a value of less than $100, shall be 
guilty of a misdemeanor and shall, upon conviction thereof, be fined not more 
than $5,000 or imprisoned for not more than one year, or both. 

(c) Whoever presents or causes to be presented, coupons for payment or 
redemption of the value of $100 or more, knowing the same to have been received, 
transferred, or used in any manner in violation of the provisions of this Act 
or the regulations issued pursuant to this Act shall be guilty of a felony and 
shall, upon conviction thereof be fined not more than $10,000 or imprisoned for 



504 



- 4 - 

not more than five years, or both, or if such coupons are of a value of 
less than $100, shall be guilty of a misdemeanor and shall, upon conviction 
thereof, be fined not more than $5,000 or imprisoned for not more than one 
year, or both. 

(d) Coupons issued pursuant to this Act shall be deemed to be obligations 
of the United States within the meaning of title 18, United States Code, section 
8." 

Regulations (7 CFR 270. A) issued pursuant to the Food Stamp Act of 1964, 
as amended, also provide any person may be subject to criminal prosecution under 
any applicable federal law or to civil liability under the provisions of 
31 U.S.C. 231, "Liability of persons making false claims," or either, or both, 
as well as to any legal sanctions as may be maintained under state law if he 
or she: knowingly makes false statement^ in any application or certification 
required by Food and Nutrition Service (FNS) Regulations, FNS Instructions, 
or by the Plan of Operation of any State agency; willfully fails to report 
changes in income and household circumstances which may affect participation in 
the food stamp program, as required by FNS Regulations; or fraudulently issues, 
acquires, transfers, uses or alters Form FNS-286, "Certification of Household 
Transfer" (the document used to continue a household's certification when it 
has moved from one project area to another; in effect, an extension of their 
certification period.). 

Regulations (7 CFR 270.4(c) also stipulate: "All individuals, partnerships, 
corporations, or other legal entities including State agencies and their delegate 
having custody, care and control of coupons and ATP cards shall at all times, in 
receiving, storing, transmitting, or otherwise handling coupons and ATP cards 
take all precautions necessary to avoid acceptance, transfer, negotiation, or 



505 



- 5 - 

use of suprious, altered, or counterfeit coupons and ATP cards and to avoid 
an unauthorized transfer, negotiation, or use of coupons and ATP cards. Such 
persons shall also safeguard coupons and ATP cards from theft, embezzlement, 
loss, damage, or destruction." 

Administrative Recourse & Financial Liabilities 
The Food and Nutrition Service is authorized to undertake certain adminis- 
trative actions affecting State agencies, food stamp recipients, retail food 
stores, meal services and wholesale food concerns when FNS makes an administra- 
tive determination that an illegal act has been committed, or following prosecu- 
tion, or when prosecution is declined. FNS is also empowered to recoup federal 
funds lost in the perpetration of illegal acts through the assignment of financial 
liability to the State agency, food stamp recipient, retail food store, wholesale 
food concern, or meal service. 

For example, the Food and Nutrition Service may assign financial liability 
to the State agency for the value of any free coupons issued as a result of 
gross negligence or fraud on the part of the State agency. 

The State agency is financially liable to FNS for the face value of lost 
coupons or the sums required to be collected by it in payment of the purchase 
requirement for the stamps, including coupons or funds lost as a result of 
thefts, embezzlements, or unexplained causes. The State is relieved of liability 
if it establishes to the satisfaction of FNS that the coupons were recovered 
or destroyed prior to their presentation for redemption. The State agency is 
also financially liable for the bonus value of all coupons purchased through 
the use of documents which are stolen or embezzled from or lost by the State 
agency. 

If it is ascertained an individual recipient household has fraudulently 
obtained food stamps, the State agency is responsible for making all reasonable 



506 



- 6 - 

efforts at collecting from the individual recipient the value of any free 
coupons involved. Any and all repayments made by the recipient to the State 
agency must be fully remitted to the Food and Nutrition Service. A recipient 
may be disqualified from further participation in the program, for such period 
of time as the State agency may determine, if the recipient fraudulently acquires 
food stamps by failing to comply with provisions of FNS Regulations, the State 
Plan of Operation or any procedure or instructions issued by FNS or the State 
agency. Financial liability is not assessed against the State agency for the 
issuance of excess free coupons as a result of recipient fraud if the State 
agency prudently carries out its responsibility to investigate the case and 
undertakes reasonable collection efforts, as defined by the Food and Nutrition 
Service. 

Under the Food Stamp Act, as amended, and current regulations, any 
authorized retail food store, meal service, or wholesale food concern may 
be disqualified from further participation in the food stamp program, for 
a period of up to three years, if the firm fails to comply with the Food Stamp 
Act or its regulations. When FNS determines a retail food store, meal service, 
or wholesale food concern accepted coupons in violations of provisions of the 
Food Stamp Act, or its regulations, FNS may deny the claim for redemption of 
such coupons. In the event the coupons have been redeemed, FNS may make a 
monetary claim against the firm for the coupons involved. Failure to pay the 
claim may result in disqualification from participation in the program or denial 
of application for reauthorization submitted by the firm, if previously dis- 
qualified, until the claim is paid. 



507 



- 7 - 

Section 12 of the Food Stamp Act, "Determination and Disposition of 
Claims," states, "The Secretary shall have the power to determine the amount 
of and settle and adjust any claims and to compromise or deny all or part of 
any such claim or claims arising under the provisions of this Act or the 
regulations issued pursuant to this Act (7 U.S.C. 2021)." 

State agencies must provide fair hearing before the agency, or an 
evidentiary hearing at the local level with a right to appeal to an agency 
hearing, for those food stamp households who believe they have been aggrieved 
by any action taken by the State agency or state issuing agency in its admin- 
istration of the program which affects the participation of the household in the 
program. FNS regulations require the State agency to take prompt, definitive 
and final administrative action within 60 days of any request for a hearing. 

A retail food store, wholesale food concern, or meal service is provided 
the opportunity for an administrative review by the Food and Nutrition Service 
in the event it is disqualified from participation in the food stamp program; 
or is denied all or part of any claim under provisions of Section 12 of the 
Food Stamp Act, "Determination and Disposition of Claims." Firms dissatisfied 
with the decision of the administrative review may obtain judicial review of 
that determination by filing a complaint against the United States in the 
U.S. District Court for the district in which they reside, or are engaged in 
business, or in any court of record of the State having competent jurisdiction. 

Organization and Responsibilities . 

The Federal Government has primary responsibility for handling suspected 
cases of gross negligence by a state agency; certifying and issuing office 
employee fraud; trafficking; violations by firms authorized to accept food 



75-969 O - 76 - 33 



508 



- 8 - 

stamps; counterfeiting; and thefts of cash, coupons, and ATP cards from 
issuing offices which are located in banks or post offices. 

A number of agencies and offices at the federal level may become involved 
in various phases of food stamp security in handling suspected violations: 
the Food and Nutrition Service (FNS), the Office of Investigations (01), the 
Office of Audit (OA), and the Office of the General Counsel (OGC) — all 
within the Department of Agriculture; the U.S. Postal Service; the U.S. Secret 
Service, Federal Reserve Banks; and the Department of Justice. 

The Food and Nutrition Service is the administrative heart of the food 
stamp program, operating from its headquarters in Washington, D.C., through 
six regional offices and 193 field offices. FNS is responsible for the promul- 
gation of federal guidelines, regulations and instructions to FNS regional and 
field personnel, state agencies, agents authorized to issue food stamps, and 
firms authorized to accept food coupons, regarding their responsibilities where 
program compliance and security are concerned. 

Ensuring the accountability of food stamp inventories, issuances and cash 
collections for the sale of food stamps is the responsibility of the Food and 
Nutrition Service. Operation of an effective coupon accountability system can 
have great impact upon FNS efforts to detect manipulation of coupons or the 
embezzlement of cash and coupons by food stamp personnel. Recent findings con- 
cerning irregularies in the handling and redemption of cash collections for 
food stamp sales by food stamp issuing agents have effectively illustrated the 
importance of an efficient accountability system. The final results of the 
nationwide audit which the Department of Agriculture initiated last October 
when the first irregularities were discovered have not yet been released. 
When USDA officials last testified at food stamp hearings before the House 
Agriculture Committee in February 1976, Assistant Secretary Richard Feltner 



509 



- 9 - 

stated that some $6.5 mil lion In food stamp funds was unaccounted for and 
the Department was working on its recovery. It is not yet known how much 
the final figures may differ from the $6.5 million figure, or what part of 
the final total will involve suspected violations of the food stamp program, 
which will be referred to the Department of Justice for its attention. 

The Department: of Agriculture has been aware for some time that its food 
stamp accountability system was not working effectively. Early in 1975, dur- 
ing hearings on FY 1976 appropriations, the Office of Audit submitted materials 
to the Subcommittee on Agriculture and Related Agencies of the House Appropriations 
Committee, which stated internal controls of cash collections, food coupons and 
ATP cards were not functioning properly. Examples of irregularities uncovered 
by audits conducted by the USDA Office of Audit included the misuse of cash 
receipts by issuing agents, including the use of $83,000 in food stamp cash 
receipts by one issuing agency to pay general operating expenses for the issuing 
agency; and the retention of cash receipts for excessive periods and the use of 
such receipts for investment purposes — in one county, twelve issuance agents 
had earned about $46,700 during a one year period. OA also cited the retention 
of $650,000 in recoveries from banks of cash or coupons shortages in an interest 
bearing account by a metropolitan food stamp project, pending specific requests 
or billing by the Food and Nutrition Service. 

Later in the year, the Food and Nutrition Service stated in its response 
to S. Res. 58, "In the absence of State monitoring and timely reconciliation 
by FNS, discrepancies such as manipulation of funds and/or embezzlements of cash 
and coupons have gone undetected, in some instances, for long periods of time. 

In reaction to the initial findings of the audits of issuance agents in 
early 1976, USDA announced its intention to amend food stamp regulations to 
tighten the accountability of food stamp issuance agents, in order to rapidly 



510 



- 10 - 

identify possible fund shortages and late deposit problems. 

In addition to its overall supervisory and coupon accountability respon- 
sibilities, the Food and Nutrition Service performs several functions more 
immediately related to the detection and disposition of illegal activities. 
Of approximately 1300 FNS food stamp personnel, 950 are involved in retailer 
compliance activities. USDA emphasizes education as the primary means of 
encouraging program compliance among firms authorized to accept food stamps 
in exchange for eligible food items. FNS field personnel make periodic educa- 
tional visits to provide such firms with information on program requirements 
and stress the importance of compliance. In FY 1975, 387,167 educational visits 
were made by FNS to approximately 249,000 firms authorized to accept food stamps 
during that period. 

Firms receive a minimum of either one or two educational visits annually, 
depending upon the volume of food stamp business they transact. About half of 
the firms received one visit each, and the remaining half two visits each in 
FY 1975. 

The food stamp business of such firms is monitored through such in-person 
visits to the stores, in addition to inquiries made of the local public, 
law enforcement authorities, welfare agencies and competitors, regarding 
possible violations. 

However, approximately 80 percent of the requests made by FNS for 
investigations of possible violations originate as a result of a computerized 
review of the coupon redemptions of a retail store with its actual food sales 
for a given period. Those stores showing statistically excessive redemptions 
of coupons in contrast to actual food sales and those of other stores are 
considered possible compliance violators. 



511 



- ii - 

Any indications of non-compliance with program regulations prompts a 
special compliance visit to the firm to confront the retailer with suspected 
violations and warn him of the penalties for their occurrence. 

During FY 1975, 28,501 compliance situations were cited by FNS and 14,815 
compliance letters were subsequently sent to retailers, confirming the visit 
and noting that FNS suspected the occurrence of violations in the store. The 
compliance letter gives the store^warning to correct the situation or face 
possible adverse administrative action. 

If indications of violations continue, the Food and Nutrition Service may 
request an investigation be made by the Office of Investigations. During 
FY 1975, FNS reports it requested 4,065 such investigations ba made by 01 and 
that 2,834 of these investigations were completed. Of the stores investigated, 
730 were found to have committed administrative violations and were not dis- 
qualified from participating in the program, although they did receive a warning. 
A total of 684 stores were disqualified from the program for period? ranging 
from 30 days to three years. An additional 62 stores were disqualified on the 
basis of computer redemption analysis results. 

As earlier noted, the Food and Nutrition Service also reviews reports 
referred to it by State agencies involving cases of suspected recipient 
fraud or misrepresentation where there has been an overissuance of bonus 
coupons. FNS must concur with the State agency's recommendations before 
any corrective action or other disposition of the case may be taken by the 
state agency. 

Through its headquarters in Washington, D.C., and regional and field 
offices, the Office of Investigations of the Department of Agriculture is 



512 



-Ir- 
responsible for conducting numerous investigations of various programs in USDA, 
including the investigation of alleged criminal violations of the food stamp 
program. Food stamp investigations currently account for approximately 64 
percent of the total 01 caseload, as compared with 5 percent in 1964, when the 
food stamp program was first getting underway. 

01 conducts investigations of retail food stores to determine if stores 
authorized to participate and accept food stamp coupons are selling ineligible 
items for coupons, buying coupons for cash or committing other irregularities. 

Suspected cases of trafficking are also investigated by 01 to determine 
if individuals or business establishments not authorized to participate in 
the program are dealing in food coupons for profit. Such cases include the 
illegal redemption of food coupons acquired through trafficking by authorized 
stores. 

While illegal acquisition of food stamp coupons by individual recipients 
is generally deferred to the state agency for handling, cases of individual 
recipient fraud are investigated by 01 if it is suspected the certification/ 
issuance process is being used to provide food coupons for illegal distribution 
or redemption. Suspected participation and violations by certification/ issuing 
office employees are also investigated by 01. 

The Office of Investigation does not usually have chief investigative 
responsibility for cases of burglaries, robberies, or thefts of cash, coupons 
or ATP cards from issuing offices. In such instances, the local police generally 
handle investigations unless the issuing office is located in a bank or a post 
office. In the latter two situations, the investigative responsibility is 
assumed by the Federal Bureau of Investigation and the U.S. Postal Service 
Inspectors, respectively. 



513 



- 13 - 

01 does offer assistance to local police and is responsible for providing 
all facts surrounding burglaries, robberies, and thefts from issuing offices 
to the Food and Nutrition Service so they may establish claims against involved 
state agencies to recover losses to the Federal Government. 01 obtains copies 
of the police reports and supplements them with material required by FNS to 
establish loss, such as the examination of inventory documents and any addi- 
tional interviews needed to clarify the case. 

In FY 1974, food stamp investigations took up about 35 percent of 
01 's available investigative manpower; in FY 1975, 39 percent; and in 
FY 1976, it is anticipated they will consume about 43 percent. 

Requests for investigations involving possible violations of the food 
stamp program are received by 01 Regional Offices, evaluated and, if accepted, 
scheduled for investigation. Over 80 percent of the requests for food stamp 
investigations 01 receives concern suspected violations by retail food stores, 
and over 90 percent of these requests originate with the Food and Nutrition 
Service. Of the FNS-originated requests for investigations of retail food stores, 
about 80 percent are made on the basis of stores identified through computer 
redemption analysis, as having redeemed a statistically excessive volume of 
coupons in contrast to actual food sales and other stores. Other requests 

from FNS related to retail food stores are made on the basis of observed 
violations or complaints received by FNS field personnel. Investigations 
of trafficking or receipient fraud may also be generated by requests for 
investigations from FNS, but also arise through sources of information, surveys, 
referrals from other law enforcement agencies or grow out of scheduled 
investigations. 



514 



- 14 - 

In FY 1975, the Office of Investigations devoted 74 of its overall 192 
manyears authorized for investigative work to food stamp cases. Of the 74 
manyears utilized in the investigation of food stamp cases, 46 manyears were 
employed in Investigations of firms authorized to accept food coupons. For 
FY 1976, 01 has authorized total investigative manpower of 201 manyears, of 
which 87 manyears will be devoted to food stamp investigations. Of the 87 
manyears, 52 manyears will be applied to investigations of suspected store 
violations . 

According to the testimony of Under Secretary of Agriculture, John Knebel, 
earlier this year, during House appropriations subcommittee hearings, 01 began 
a shift in the emphasis of its investigative efforts from retailer/wholesaler 
cases to the investigation of "more sophisticated abuses such as fraud and food 
stamp trafficking," and "anticipates these investigations will contribute sub- 
stantially to the integrity of the entire Food Stamp Program." 

Reports on all types of investigations are made to FNS in Washington and 
regional personnel. When evidence of a possible criminal violation has been 
established, a report is also made to the appropriate USDA Regional Attorney 
(Office of the General Counsel). The Regional Attorney determines if the 
circumstances warrant referral to a U.S. Attorney and the Food and Nutrition 
Service must defer any administrative action until advised of the U.S. Attorney's 
decision. If prosecution is initiated, FNS administrative action must await 
completion of trial and sentencing. After that, and in any case where prosecu- 
tion is declined, FNS proceeds with its action to bring about final disposition 
of the case. 

The Office of Investigations makes scheduled checks of new issuing offices 
to survey physical and operational conditions which might be condusive to 



515 



- 15 - 

abuse such as thefts or burglaries, and makes recommendations for improvements 
in physical security. 

The following chart outlines the number of requests for investigations 
received by the Office of Investigations during FY 1974 and FY 1975, as well 
as the number of investigations which were completed and the number of cases 
referred to the Office of the General Counsel. In FY 1974, of 2,531 investiga- 
tions completed, 01 determined 52 percent or 1,305 showed evidence of violations, 
while no evidence of violations was found in 1,226, or 48 percent. 

In FY 1975, 51 percent or 1,682 of the 3,313 investigations completed by 01 
revealed evidence of violations, and in the remaining 49 percent or 1,631 cases, 
no evidence of violations was found. 

Cases are broken down under the headings of "Retail food stores," 
"Trafficking," and "Recipient fraud." "Trafficking" is a general classification 
used by 01 to represent those cases of suspected violations where the food 
stamps or authorization to purchase cards involved have or would, in all likelihood, 
find their way into trafficking channels. This includes cases involving 
wholesalers, non-authorized establishments, robberies, burglaries, thefts, 
trafficking in ATP cards either by individuals or manipulation of a computerized 
system, and all other trafficking. The column on the chart labeled "Recipient 
fraud," refers to individual recipient fraud other than trafficking. 



(chart attached) 



516 





H 


1975 


4.556 


3.313 


(1,682) 
(1,631) 


1.665 






Toti 


1974 


3.047 


2.531 


(1,305) 
(1,226) 


1.536 






it Fraud 1 


1975 


co 
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•— 1 


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ON 




00 
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and 1975. 


Recipiei 


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Years 1974 


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o 


1975 


oo vr r~- 
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for Fiscal 


I "Traff: 


1974 


vD 
CO 


CM 
■4 




<r 




ve efforts 


)d stores 


1975 




3,690 


2,686 




1,330 




« 

•r-l 
4-1 
GO 
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| 


Retail foe 


1974 


2,457 


2,062 




1,145 




Office of Investigations, USDA. 




Fiscal Year 




CO 

c 
o 

4-1 

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4J 
CO 


g 

M 

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O 

IM 

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02 


Investigations Completed 


(evidence of violations) 
(no evidence of violations) 

Referred to the Office of 


I the General Counsel 





517 



- 17 - 

With a fifty percent increase in the number of referrals from the 
Food and Nutrition Service, over FY 1974, requesting investigations of 
suspected retailer violations, the Office of Investigations had a backlog 
of approximately 2,000 food stamp cases at the end of FY 1975, some of which 
were six to eight months old, according to one 01 official. 

The Office of Investigations projected the number of retailer cases, which 
could be investigated given available investigative manpower. Based on the 
man-years available and the average number of days it takes to investigate a 
retail food store case, 01 determined it had the capability to handle 3,100 
retailer cases in FY 1976, beginning on October 1, 1975. Once every 90 days, 
Office of Investigation and Food and Nutrition Service regional personnel review 

all the retail food store cases for which the Food and Nutrition Service 
has requested an 01 investigation. FNS and 01 then select for investigation 
those cases which they judge possibly pose the greatest threat to the food 
stamp program. The remainder of the cases become part of a backlog. At this 
time, a decision has not been made as to how the backlog of cases will be handled. 
Staff understands the feasibility of several alternatives is being studied by 
the Department at this time. 

The Office of Audit performs audits and other inquiries of all USDA 
program and administrative activities. Like the Office of Investigations, the 
Office of Audit operates independently of all USDA offices and agencies. OA 
functions through its office in Washington and six regional offices. 

OA reviews and appraises the food stamp program and its administrative 
activities to determine the effectiveness of program operations, compliance 



518 



- 18 - 

with laws and regulations, and economical and efficient management of resources. 
The Office of Audit conducts periodic audits of food stamp project areas, state 
agencies, and FNS District Offices, as well as specialized audits of specific 
problem areas. During FY 1975, 709 audits of the food stamp program were made 
by OA, as compared to 630 audits in FY 1974. Approximately 747 audits were 
scheduled for the current fiscal year. In FY 1975, 20 percent of OA resources 
were devoted to the food stamp program. 

Reports of audit results are made by OA to the Food and Nutrition Service 
with recommendations for corrective action where needed. Emphasis is placed 
on the improvement of resource accountability, effective and efficient 
realization of program objectives, and the maintenance of program and personnel 
integrity. 

With respect to the detection of illegal activities, OA audits generally 
concentrate on overall administrative aspects of the program rather than 
single instances of abuse. However, indications of the latter, uncovered 
during the course of an audit, such as thefts, trafficking, or fraud are turned 
over to the appropriate federal, state or local authorities for investigation. 

Audits form the basis for establishing claims of gross negligence against 
state agencies, as well as the assessment of dollar losses to the program as a 
result of gross negligence. Activities undertaken by state agencies, related 
to the certification or issuance process, which do not substantially comply with 
program regulations and result in losses of federal funds can constitute grounds 
for a charge of gross negligence. In addition, failure to take corrective action 
on a prior audit or FNS administrative review would be a strong basis for gross 
negligence where conditions causing losses have been permitted to continue. 



519 



- 19 - 

Since 1970, OA audits have resulted in the establishment of gross negligence 
charges on nine occasions against seven States (California, Hawaii, Illinois, 
Michigan, Nebraska, New Jersey, Washington) and the District of Columbia. 
Statistically valid audits employed by OA to project dollar losses to the 
Federal Government as a result of these charges estimate total federal losses 
at approximately $1.7 <*wllu»i » Types of situations found within state agencies' 
administrative frameworks, which eventually formed the basis for claims of 
gross negligence against the seven states and the District of Columbia included: 
disregard of program regulations; failure to correct irregularities; inadequate 
program security resulting in thefts or fraudulent acquisition of ATP cards; 
issuance and negotiation of duplicate ATP cards; overissuances of bonus coupons; 
multiple certification and issuance errors; poor computer controls; and the 

implementation of instructions or procedures without necessary approval of 
USDA. 

Both the Office of Audit and the Food and Nutrition Service have noted 
drawbacks to using "gross" negligence determinations. In its study of the 
food stamp program mandated by Senate Resolution 58 last year, the Food and 
Nutrition Service noted: "At this time it is difficult to make a determination 
of "gross negligence" against a State agency for deficiencies in the adminis- 
tration of the Food Stamp Program. If "gross" were dropped from that section 
of the Act, prosecution would be easier since it continues to be a difficult 
legal concept to establish for purposes of the Food Stamp Program even when a 
State agency has been admittedly negligent in the certification of recipients." 

In summarizing its audit efforts where gross negligence is suspected, the 
Office of Audit observed, "The FSP Act requires that gross negligence be proved 
before actions can be taken against States not properly administering the 



520 

- 20 - 



program. It has been extremely difficult to prove gross negligence and recover 
program funds improperly expended. In most cases it would have been relatively 
easy to prove negligence. We could have recovered millions of dollars in 
misspent funds." 

The Office of the General Counsel is responsible for maintaining liaison 
with the Department of Justice and the U.S. Attorneys with respect to all 
litigation involving the USDA. In actions brought by the government on behalf 
of the Department, OGC analyzes the Investigative report, if any, gathers all 
documents necessary to support its case and transmits the case with a full 
report, including appropriate legal arguments to the Department of Justice for 
action. OGC carries out its activities in Washington and 16 field locations 
in the United States and Puerto Rico. 

In FY 1975, the Office of the General Counsel processed a total of 931 
cases involving suspected food stamp violations, of which 672 were referred to 
U.S. attorneys and 259 were closed by OGC without referral because of insufficient 
evidence. A total of 1,665 cases had been referred to OGC for its review by 
the Office of Investigations. 

Although the Department of Agriculture has tried to encourage federal 
and state prosecutions of food stamp cases, the courts have remained reluctant 
to take cases of suspected food stamp violations to court. In 1975, USDA 
officials testified at House appropriations hearings that "Although we have 
found numerous program violations, the Federal prosecuting attorneys are so 
busy with matters and violations of law that are of so much greater moment 
than the violations or infractions under the food stamp program, that it is 



521 



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522 

- 22 - 



difficult to have one of the prosecuting attorneys at the Federal level take 
these cases to court." 

In February 1976, materials submitted by Assistant Secretary Richard Feltner 
as part of his testimony before the House Agriculture Committee noted: "USDA 
(FNS) encourages prosecution of food stamp fraud on the State level whenever 
possible. Successful State prosecution depends on the applicability of the 
particular State's criminal statutes. As of September 1975, 25 States have 
statutes which specifically apply to food stamp fraud, 24 have general statutes 
which can be applied to food stamp fraud, and 5 States are without any applicable 
laws." 

During FY 1975, there were six successful federal prosecutions of food 
stamp fraud cases, in contrast to 633 successful prosecutions at the state 
level for the same period. 

Staff was unable to ascertain what number or percentage of food stamp 
fraud cases include requests for prosecution and how many of these actually 
go to court. Justice Department officials indicated records are not kept for 
this purpose, and at the Department of Agriculture, FNS only requires regional 
offices to forward figures on the number of "successful" prosecutions for such 
cases. 

With respect to retailer-wholesaler violations, FNS records show that in 
FY 1975, 666 cases were referred to the Department of Justice, but that prose- 
cution was declined on 499, or 75%, of the cases. There were 147 cases resulting 
in successful prosecutions. 

The Federal Reserve Banks and the U.S. Secret Service are primarily respon- 
sible for monitoring the food stamp program for possible counterfeit food 
coupons . 



523 



- 23 - 

Banks accept food coupons for credit or redemption from firms authorized 
to take food coupons in exchange for food and forward them to the Federal 
Reserve Banks for redemption. Through an agreement with the Department of 
Agriculture, Federal Reserve Banks examine the genuineness of the redeemed food 
coupons. 

Each Federal Reserve Bank selects the personnel to make the examinations 
of coupons and the dates on which such examinations are to be made. Not less 
than two percent of the paid coupons of the two largest denominations are 
examined once every sixth business day. 

If the Federal Reserve Bank detects any coupons in a deposit of a depositing 
bank which appear not to be genuine, all the coupons of the same denomination 
in that bank's deposit are examined. All coupons of the same denomination 
received from the bank concerned are examined during the next succeeding five 
busine-s days, unless USDA or the Secret Service advise the Federal Reserve 
Bank otherwise. 

The Secret Service advised staff most counterfeit food coupons are of 
very poor quality and rarely get beyond the retail food store level or the 
local bank. In the history of the food stamp program, less than 1.5 percent 



75-969 O - 76 - 34 



524 

- 24 - 



or $29,190 of the total $2,271,962, which has ever been seized in counterfeit 
couponB has been discovered in circulation. More recently, counterfeits with 
a total value of $1,134,630 were seized in FY 1974, of which only $295 were 
found in circulation. In FY 1975, $835,195 worth of counterfeit food coupons 
was seized, with $9,562 of that total discovered in circulation. 

FNS records for counterfeit activity do show far fewer coupons are seized 
by the government after they have gotten into circulation, than the number found 
before making it into circulation. For example, in FY 1974, counterfeits with 
a total value of $1,134,630 were seized, of which only $295 worth were found in 
circulation. In FY 1975, $835,195 worth of counterfeit food coupons were seized 
with $9,562 of that total being found in circulation. 

From time to time, the U.S. Postal Service may become involved in handling 
suspected cases of food stamp violations. Food coupons are carried through 
the malls as bulk shipments en route to shipping points, and in some food stamp 
project areas, ATP cards are forwarded through the mail to recipient households 
from certification offices. 

Also, under a Memorandum of Agreement between the Department of Agriculture 
and the U.S. Postal Service, state agencies which administer the food stamp 
program may contract with USPS for post office issuance of food stamp coupons. 
Approximately 2,600 postal outlets presently provide food stamp issuance 
services to 17 States. Under the contract agreement with state agencies, USPS 
agrees to safeguard and protect the coupons and cash it handles as an issuing 
agent. USPA also assumes financial liability for lost coupons with the exception 
of those lost through destruction and acceptance of counterfeit, forged or 
altered ATP cards where such conditions are not obvious. 



525 



- 25 - 

In coordination with the USDA, U.S. Postal Inspectors investigate mail 
thefts and thefts of cash, coupons, or ATP cards from USPS issuance offices, 
and postal worker fraud in the manipulation of ATP cards or coupons through 
the mails. During FY 1975 and the first two quarters of FY 1976, there were 
no mail thefts of food coupons. 

The Postal Service has informed staff it has investigated two cases of 
postal worker manipulation of the variable purchase option on authorization 
to purchase cards, which had been reported by other postal employees. USPS 
stated there was no practical way to detect such manipulation after the fact, 
and it was almost impossible to detect ATP manipulation by audit. The previous 
provisions of the old memorandum of agreement between USDA and USPS exacerbated 
the problem by allowing a $100 tolerance factor in the monthly reconciliation of 
actual and authorized issuances. In an effort to tighten up accountability, the 
recently negotiated new memorandum of agreement between USDA and USPS requires 
that 100 percent of the authorized issuances be reconciled with actual issuances. 

Statistics on general categories of food stamp violations . 

Statistics on food stamp violations are generally broken down in to the 
following categories: 1) counterfeiting; 2) thefts; 3) gross negligence; 
4) wholesaler-retailer violations; 5) food stamp certification and/or issuing 
office personnel fraud; and 6) recipient fraud/misrepresentation. 

There is no overall coordinated data collection system on illegal activities 
in the food stamp program, and statistics should be view cautiously. At the 
federal level, for example, the multiplicity of offices and agencies, which 
share some responsibility for monitoring and controlling illegal activities, 
yields variations in reporting methods, thus making "across— the— board" comparisons 



526 



- 26 - 

of cases and figures difficult. For example, the chart which appears in 
this paper, outlining 01 investigative efforts contains figures on retail 
food store cases which differ from those reported by FNS for retail food 
stores during the same period. 01 states it received 3,690 requests for 
investigations of retail food stores, and 2,686 of those investigations were 
completed. In contrast, FNS states it requested 4,065 investigations and 
received reports on 2,834. Both FNS and 01 stand by their own reported 
statistics, noting that such differences are not uncommon and most likely 
due to differences in office filing and other working procedures. 

In addition, it is not unusual for statistics on reported cases from 
previous reporting periods, such as past fiscal years, to fluctuate. Statistics 
may rise, or fall, as late reports are made, backlogs are processed, new cases 
uncovered; or new evidence developed which changes the character of a case. 

The following charts contain information on violations provided by the 
Food and Nutrition Service. 

There is no chart for trafficking violations per se. Figures on trafficking 
are elusive, and offices interpret the term differently. Some offioea consider 
it a motive for the perpetration of violations, such as thefts or embezzlement 
rather than a primary category of a violation, except in instances where persons 
are actually caught in the act of trafficking. On the other hand, the Office 
of Investigations, for example, considers all violations possible trafficking 
cases if the coupons or ATP cards have or would likely find their way into 
trafficking channels had the violation gone undetected. This includes cases 
such as thefts, some wholesaler and retailer cases, in addition to some cases 
of recipient fraud, or embezzlement by certification or issuance office personnel. 



528 

- 28 - 



Source: FNS.USDA 



FY 1974 



Reports of Loss 

*Thefts of cash & coupons 

Bulk shipments lost In 
transit 



Occurrences 



11 



Dollar Loss 
$375,142.15 

84,826.50 



FY 1975 



Reports of Loss 

*Thefts of cash & coupons 

Bulk shipments lost in 
transit 



Occurrences 
62 



Dollar Loss 
$572,037.62 

49,770.62 



*Includes cases where ATP ' s were stolen and used to obtain coupons. 



529 



- 29 - 



Gross Negligence by State Agencies, 1970 - 1975 



Area Original Billing 



Washington, D.C. 


63,861.00 


Cook County, Illinois 


230,274.25 
22,926.00 


Monmouth County, New Jersey 


274,439.00 
70,787.00 


Los Angeles, California 


720,000.00 


Santa Clara, California 


216,400.00 


Oahu County, Hawaii 


51,000.00 


Lincoln, Nebraska 


4,174.00 


Seattle, Washington 


20,500.00 


Michigan 


17,740.00 


Total 


$1,692,101.25 



Source: FNS.USDA 



530 



- 30 



Re taller /Wholesaler Violations 



Investigations Requested 
Investigations Received 



FY 1974 
2,664 
2,264 



FY 1975 

4,165 

2,834 



Number of investigation indicating evidence 
of violations ** 

Number of investigations indicating no 
evidence of violations 



1,145 
1,119 



1,452 



1,382 



Cases Referred to Justice 725 

Cases declined prosecution 6Q2 

Cases resulting in successful prosecutions £17 

Most severe fine $3 500 

Most severe probation 5 years 

Most severe jail sentence 6 months 

Administrative Actions 

Less than disqualification (warning letter, store 

visit, confirming letter) 639 

30-day disqualification 42 

60-day disqualification 105 

90-day disqualification 48 

6 months disqualification 268 

1 year disqualification 262 

3 year disqualification 9 

Total disqualifications 734 



666 
499 
147 
$3,000 
8 years 
3 months 



730 
44 
106 
30 
238 
259 

7 

684 



Charge letter sent based on red« 

exceeding food sales 
Disqualifications 



iptiona 



81 
69 



107 
62 



**does not directly correspond to administrative actions taken during the year 
since criminal action often delays administrative action. 



Source: FNS, USDA 



531 

- 31 - 



FNS notes to accompany wholesaler-retailer violations figures : 



"The most frequent abuse found during 01 investigation is the sale for 
food coupons of nonfood items most frequently found in an average shopping 
basket such as soaps, paper products, and health and grooming aids. Less 
frequently, more serious violations are uncovered such as the sale of 
alcoholic beverages for food coupons, the exchange of food coupons for cash, 
or the purchase of recipients' Authorization to Purchase Cards (ATP's) for 
cash. 

Removal from the program may extend from thirty days to three years, depending 
upon the seriousness of the violations and whether the violations seem to 
have occurred due to poor supervision or deliberate policy. Generally, dis- 
qualification periods of six months and more are reserved for cases in which 
the evidence indicates a policy to violate the regulations even though FNS has 
attempted to secure voluntary compliance through store visits and letters to 
management. The maximum period of disqualification, three years, is reserved 
for extremely serious situations and is normally assigned when a store which 
has previously been disqualified for a substantial period is found to be 
again violating following reauthorization. It has also been assigned in the 
few cases which have involved large-scale trafficking in food coupons or ATP's. 

Retail food stores may also be removed from the program if the amount of food 
coupons they present for redemption in a given period, usually one year, exceeds 
their eligible food sales for the same period since it would not be legally 
possible to do a greater food coupon business than 100 percent of eligible 
food sales. Disqualification in such instances will normally be for one year." 

With respect to the involvement of retailers and wholesalers in trafficking 
of food stamps, the Food and Nutrition Service reports, "We have reviewed our 
cases reported during fiscal years 1974 and 1975. This study revealed no 
evidence of organized trafficking or blackmarketing of food coupons during 
1975. What it did show was that, in a small percentage of cases, agents of 
the Office of Investigations successfully exchanged coupons for cash at a 
discount with personnel of retail stores. The amounts involved averaged less 
than $1,000 in coupons for $400 to $500 in cash. There was one such instance 
reported in 1974 involving nine individuals and a total coupon value of $14,730." 



532 



~ 32 ~ 



rorfrlf ^pafinn anH T Q Qua nr p 
^CL LlilLaLlUll ctllU lajUdUtc 


Pprqnnnpl Fraud FY 1Q74-1Q7S 




Loss 


S tate 


Number of Occurrences 


Arkansas 


3 




20,304 + 


California 


10 




264,706 + 


Colorado 


2 




6,076 


Oregon 




Not 


yet determined 


Alaska 






1,776 


Arizona 






1,000 + 


Louisiana 


1 




1,671 


Virginia 


2 




3,842 


New Jersey 


1 


Not 


yet determined 


Alabama 


1 




42,306 


Georgia 






51,462 


North Carolina 


1 




3,541 


Mississippi 


3 




32,011 


Illinois 


3 




3,331 + 


Indiana 


1 




6,000 


Iowa 


2 




13,587 


Michigan 


9 




7,722 + 


Missouri 


2 




23,654 


Ohio 


7 




72,142 


District of Columbia 


Not yet determined 


Not 


yet determined 



Source: FNS.USDA 



533 



- 33 - 

CLAIMS AGAINST FOOD STAMP RECIPIENTS, Fiscal Year 1975 
Source: FNS, USDA 



STATE 



NUMBER OF CLAIMS 
ESTABLISHED 



TOTAL AMOUNT 
OF CLAIMS 



NORTHEAST REGION 



Connecticut 

Delaware 

Maine 

Maryland 

New Jersey 

New York 

Pennsylvania 

Rhode Island 

Vermont 

Virginia 

West Virginia 



6 
38 
26 
452 
175 
567 
1216 
1 
3 

591 
208 



1,034.50 
9,272.00 
9,793.00 
58,192.90 
21,061.00 
185,292.25 
115,635.22 
622.50 
1,973.20 
86,932.75 
98,670.50 



TOTAL 



3283 



588,479.82 



SOUTHEAST REGION 



Alabama 
Florida 
Georgia 
Kentucky 
Mississippi 
North Carolina 
South Carolina 
Tennessee 



2395 
5322 
725 
1599 
2015 
826 
858 
2502 



TOTAL 



16,242 



325,939.40 
805,429.62 
88,044.25 
332,407.20 
472,482.50 
162,875.25 
299,765.60 
511,428.00 



2,998,371.82 



MIDWEST REGION 



Illinois 

Indiana 

Iowa 

Kansas 

Michigan 

Minnesota 

Missouri 

Nebraska 

Ohio 

Wisconsin 



370 
1252 
271 
73 
113? 

122 
1052 
466 
782 
276 



76,638.00 
147,088.70 

31,018.46 
7,866.00 
112,774.95 

26,585.75 
304,267.75 
103,407.50 
163,961.75 

37,876.75 



TOTAL 



5801 



1,011,485.61 



534 



WESTERN REGION 



- 34 



Alaska 


7 


Ariiona 


90 


Cal if ornia 


2260 


Idaho 


14 


Nevada 


7 


Oregon 


1026 


Washington 


308 


TOTAL 


3712 


-CENTRAL REGION 




Arkansas 


97 


Colorado 


526 


Louisiana 


839 


Montana 


115 


New Mexico 


938 


North Dakota 


88 


Ok lahoina 


124 


South Dakota 


53 


Texas 


2309 


Utah 


202 


Wyoming 


134 


TOTAL 


5425 


GRAND TOTAL 


34,463 



7,196,00 
78,900.75 
426,987.75 
4,414.75 
1,736.00 
154,546.35 
38,642.50 



712,424.10 



26,768.75 
106,948.45 
317,853.75 
7,059.60 
199,407.50 
20,376.75 
29,788.75 
10,284.50 
180,596.98 
66,030.75 
20,420.00 



985,535.78 
6,296,297.13 



With respect to this chart, FNS states the majority of over issuances documented 
on this chart are due to cases of fraud or deliberate misrepresentation of facts 
by the household. Some of the over issuances are due to certification errors 
on the part of the state agency or to misunderstanding of program provisions by 
the household; however, since collection action may be declined in these 
instances, they would not all be documented on the chart. This chart represents 
the total number and value of claims for which collection action was undertaken 
in fiscal year 1975. 

Certain cases such as all fraud cases and non-fraud cases involving food coupons 
worth more than $400 must receive the concurrence of FNS before the state agency 
can decline collection activity. This chart does not include 2,984 cases con- 
sidered uncollec table during FY 1975, with a value of $800,500. 



535 



- 35 - 

The preceding statistics prompt the inevitable question, do such figures 
represent actual levels of violations against the food stamp program? Whatever 
the actual levels of illegal activities, it seems unlikely statistics used by 
federal food stamp administrators for several of the major categories of viola- 
tions are accurate. 

Possible violations usually become known to food stamp authorities in two 
fashions. First, they may be alerted through reports from outside sources, 
such as the public or local law enforcement agencies. However, such a method 
of detecting violations is too random to be a consistently reliable means of 
overseeing program security. 

Secondly, there are working procedures which enable authorities to monitor 
the food stamp program and to identify possible violations. Some of these 
procedures, while of great importance to program security, are more properly 
considered tools of administrative review, with the detection of illegal 
activities not being the primary purpose for their use. Such procedures would 
include, for example, various types of audits, quality control reviews, and the 
food stamp accountability system. Irregularities which are identified in the course 
of the use of such procedures, which might involve possible criminal violations 
of the food stamp program, are reported to the appropriate officials for 
investigation. The admitted failure of the Food and Nutrition Service to 
adequately administer the food coupon accountability system throws the security 
of food stamp funds, coupons and ATP cards into question. Until all funds and 
documents have been accounted for and the effective monitoring of the system 
undertaken, the accuracy of present figures on coupon losses or statistics addres- 
sing levels of retailer compliance, or certifying and issuance 
personnel fraud will, at least from the standpoint of coupon accountability as 



536 



- 36 - 

a means of detecting possible abuse, be In question. 

Other working procedures are more Immediately related to the identification 
of illegal activities and should be noted for the areas of retailer violations 
and suspected recipient fraud in particular, so as to provide a clearer perspective 
on what statistics on these violations reflect. 

"Retailer" compliance . With over 96 percent of the firms authorized to 
accept food stamps in exchange for eligible food items being of the retail food 
store variety, the monitoring efforts of FNS with respect to compliance are 
primarily geared toward this type of firm. Less than four percent of the firms 
authorized to accept food stamps in FY 1975 were made up of wholesalers and the 
so-called "prepared meal services," which include communal dining facilities for 
the elderly, and drug addiction and alcoholic treatment and rehabilitation centers. 
In FY 1975, there were 239,236 retail firms in contrast to 3,985 wholesalers 
and 5,597 prepared meal services authorized to accept food stamps. 

Federal instructions on compliance for prepared meal services state, 
"meal services will be educated and supervised in program operations as are 
regular retail stores through regularly scheduled educational visits to the 
firms. Generally, the visits to meal services will be planned and conducted in 
the same manner as are visits to regular retail stores with some exceptions." 
The same instructions also state that with respect to compliance, FNS field 
personnel are to apply current policy's and procedures for detecting, handling 
and documenting any compliance problems. Such efforts are undoubtedly inhibited 
by the fact that one of the two major compliance monitoring methods employed by 
FNS, and from which 80 percent of its requests for investigations originate 
is "computer redemption analysis," a technique presently applied exclusively to 
retail food stores. This leaves the oversight of compliance for prepared meal 
services to the second major monitoring procedure employed by FNS, which is the 



537 



- 37 - 

solicitation of rumors or reports of observed violations from the local public, 
law enforcement authorities, local welfare offices or local agencies involved 
in some aspects of the licensing or regulation of prepared meal services. 

The Office of Investigations reports that in FY 1975, the Food and Nutrition 
Service did not request any investigations of prepared meal services. In FY 1976, 
there wer two requests to monitor investigations which were being conducted by 
state agencies on two drug rehabilitation and alcoholic treatment facilities 
authorized to accept food stamps. 

The Office of Audit reports that FNS has requested a special emphasis 
during FY 1976 on state-certified drug addiction and alcoholic treatment and 
rehabilitation centers which are participating in the food stamp program. OA 
has indicated there are about 20 centers concerned and "FNS would like to know 
whether the food stamps are being used in accordance with regulations, and that 
the stamps are actually going to the centers and are being used by the center 
rather than by the drug addicts and alcoholics." 

At this time the effectiveness of FNS retailer compliance activities is 
uncertain. Investigations of possible non-compliance situations, which account 
for about 80 percent of the food stamp investigations done by 01 have been 
significantly affected by the quota on retail investigations imposed last fall 
due to 01 manpower and resource limitations. Carrying out even the number of 
investigations on retail stores allotted under the quota — 3100 — has been 
substantially impeded by the transfer of 01 manpower to assist in review of 
irregularities recently uncovered regarding the handling and redemption of food 
stamp funds by food stamp issuance agents. At this time, FNS officials state they 
have been given no definite indication by 01 as to how long the present situation 
might be expected to continue. Thus far during FY 1976, approximately 1600 retail 
investigations have been conducted. FNS does not have a specific figure on the 



538 



- 38 - 

backlog of retail investigations which has been created, but ballpark estimates 
range between 3,000 to 4,000. The full impact of the ripple effects of the 
mobilization of 01 manpower to work on vendor irregularities would be extremely 
difficult to calculate, since FNS officials have informed staff FNS has advised 
its retail compliance personnel in the field to limit the number of requests for 
investigations due to present absence of available manpower to handle them. 

At this time, USDA is considering alternatives to resolve the problems 
of retail investigations. FNS officials indicate one option which is being 
given major consideration is the establishment of an investigative unit within 
the Food and Nutrition Service itself. 

The most common retailer violation found by investigators is the sale of 
ineligible items in exchange for food coupons. FNS maintains that computer 
redemption analysis, which compares the food stamp redemptions of a retail store 
against its actual food sales and those of nearby competitors is an effective 
means of identifying possible violations, since a store could not legally have 
a larger volume of coupon redemptions than food sales. 

FNS officials note the types of requests for investigations of retail stores 
most affected by the 01 quota will be those which originate as a result of computer 
redemption analysis reports. 

Although it should not be construed as an indication of present compliance 
levels for retail stores, it should be noted there has only been one, nationwide 
direct, "no-advance" warning retailer compliance sampling conducted by the 
Department of Agriculture. During March and April 1969, the Office of the 
Inspector General (now known as the Office of Audit and the Offfice of Investiga- 
tions) conducted a survey to obtain data on the compliance of retailers authorized 
to accept food coupons in the 12 largest metropolitan areas served by the food 
stamp program. 



539 



- 39 - * 

The twelve areas included in the survey were: Buffalo, Pittsburgh, Cleveland, 
Detroit, Minneapolis- St . Paul, Los Angeles, Philadelphia, Baltimore, Cincinnati, 
Chicago, St. Louis and San Francisco-Oakland. These twelve areas encompassed 
16,637 participating retail food stores, which served 26.5 percent of all food 
stamp recipients and accounted for 30.5 percent of the total value of all food 
stamps issued. During FY 1968, the fiscal year in which the survey was conducted, 
these areas received a total of $135 million in food stamps, of which $52.5 million 
were "bonus" coupons. 

Using scientific sampling methods, a random sample of 367 retail stores was 
selected from the 16,637. There were no preliminary visits or evaluations of 
individual stores. Retail food store investigations are usually conducted by 
special agents, utilizing the paid services of local persons who attempt to make 
purchases with food stamps of ineligible items or to exchange the coupons for 
cash, at participating stores. Hired shoppers previously unknown at the stores 
were used and carried standard grocery lists containing various non-food items. 

The survey revealed that of the 367 stores tested, 162 or 44.1 percent sold 
ineligible items. Ineligible items which hired shoppers were able to purchase 
included soap, toilet paper, toothpaste, scrub brushes, light bulbs, rubber gloves, 
furniture polish, hair spray, deodorant, scotch tape, mops, air freshener, magazines, 
cigarettes, beer, and other alcoholic beverages. Another 45 or 12.3 percent of 
the stores committed administrative violations only, such as giving cash in change, 
giving due bills over 49 cents, and overcharging. The report on the results of 
the survey stated: "Based on these occurrence percentages, statistical projections 
to the total group of 16,637 stores means that between 6,472 and 8,219 stores are 
selling ineligible items to strangers for food stamps. Likewise about 1,497 to 
2,695 stores are committing administrative violations." 



75-969 O - 76 - 35 



540 



- 40 - 

On the basis of the survey results, the Office of the Inspector General 
concluded: "1) There is large scale retailer and recipient noncompliance; 
2) OIG and C&MS (Consumer and Marketing Service, predecessor to FNS) compliance 
efforts are not effective or efficient; 3) Compliance be retailers is governed 
by their ethics of the situation as to whether and what non-food items will be 
sold; and 4) Testing and compliance on an individual store basis is not realistic 
with present resources." 

The following September, the Administrator of FNS forwarded to the Assistant 
Secretary for Consumer and Marketing Services a lis of "certain actions we 
believe will be responsive to alleviate the problem." Examples of actions to 
improve compliance or more effectively monitor it included: 

1) more emphasis on educating retailers concerning the rationale of the 
food stamp regulations; 2) seeing the greatest compliance benefit is realized 
from investigations and audit; 3) utilizing coupon redemption analysis; 4) empha- 
sizing the state agency responsibility to educate recipients on their obligations 
as participants in the food stamp program; 5) increasing public awareness of 
program objectives; and 6) encouraging more prosecutions of food stamp violations. 

In the seven years since the sampling was made, reforms were made, but since 
there has been no comparable sample made subsequent to the 1969 survey, a 
"before and after" comparison of retailer compliance is not available. 



541 



- 41 - 

Recipient fraud, the Federal perspective . Recipient fraud is without doubt 
one of the most controversial categories of food stamp violations. Because 
state agencies interview and certify eligible food stamp recipients, they have 
the primary responsibility for the identification and investigation of sus- 
pected cases of recipient fraud. State efforts to control and monitor 
recipient fraud will be dealt with in more detail in the second half of this 
study. 

Federal officials notify state agencies of any indications of recipient 
violations which may turn up in the course of federal reviews of the program, 
but federal food stamp administrators are mainly involved in handling 
recipient fraud to the extent they issue pertinent guidelines and instructions 
to the state agencies, and the state agencies must have federal concurrence 
on each case where food coupons have been improperly issued as a result of 
fraud, before action can be undertaken to recoup any loss to the program. 

The results of a working procedure known as "claims review determinations" 
are utilized by federal food stamp administrators to indicate levels of recipient 
fraud. The primary purpose of this process is to assess financial liability 
against the appropriate party whenever an overissuance of bonus food coupons 
becomes known to the state agency. The state agency must determine whether the 
cause of the overissuance was a result of agency error, a misunderstanding of 
the program requirements by the recipient, or fraudulent misrepresentation by 



542 



- 42 - 

the recipient. Once financial liability has been determined, an effort is made 
to recover the value of the overissuance. 

Federal instructions for claims review determinations state all cases 
of overissuances of bonus coupons involving suspected recipient fraud or mis- 
representation must be reported to the Food and Nitrition Service, as well as 
all non-fraud overissuance cases with coupon values of $400 or more. 

State agencies are not required to report non-fraud cases of coupon 
overissuance, i.e. due to recipient misunderstanding of the program require- 
ments or error on the part of operating personnel (except cashier's error), 
which involve coupon values of less than $400. State agencies may also decline 
collection action on such cases, to recover the value of excess free coupons 
from the recipient household, if gross negligence is not involved, if it Is 
determined collection of any significant sum cannot be made, or if the cost 
of collection will likely exceed the amount to be recovered. 

The state agency may also decline collection on fraud cases and non-fraud 
cases involving overissuances of $400 or more, but only with the concurrence 
of the Food and Nutrition Service. 

Since the Food and Nutrition Service has used the results of the claims 
review determination procedure to indicate levels of recipient fraud, it is 
of great Importance to know 1) how the state agencies go about identifying 
cases of possible overissuances and 2) how the state agencies distinguish 
between cases of overissuance resulting from fraud, misrepresentation, or 
an honest misunderstanding of the program requirements. 

The Federal Government does not actually know how each state agency 
proceeds to identify possible cases of coupon overissuances. FNS has noted 



543 

- 43 - 



losses to the food stamp program may be revealed by several means, such as 
audits, investigations, quality control reviews, casefile reviews, or routine 
caseworker or supervisory reviews. However, cases are not reviewed specifically 
for the purpose of establishing claim determinations. Claim determinations 
are required at any time the State discovers a loss to the program, but the 
USDA does not mandate a specific procedure to identify loss cases. Therefore, 
there are no federal guidelines which instruct all state agencies to utilize 
consistent or even similar methods of identifying cases of coupon over issuances, 
The Food and Nutrition Service, in effect, does not know on what basis cases of 
coupon overisauances are identified by the state agencies, or for that matter, what 
percentage of the total cases identified are represented by cases where fraud 
is suspected. 

Distinguishing fraud, or deliberate misrepresentation, from misunderstanding 
is critical to the claims review process, since upon such distinctions is based 
the obligation of the state agency to report overissuance cases involving losses 
of $400 or less. 

Federal instructions to the state agencies for the claims review determina- 
tion process state: " Fraud as used herein means the obtaining of free coupons 
under false pretenses. This shall include any instance where misrepresentation 
is constituted on circumstances of a recipient's failure to comply with the 
certifying agency's instructions for the reporting of any change in income or 
household composition." However, distinctions are not clearcut. Elsewhere in 
the instructions, it is stated with respect to the recipient's responsibility to 
report any change in income or household circumstances, "applicant households 
should be advised that continuing failure to report such changes could constitute 
fraud and/or misrepresentation." 



544 

- 44 - 



The claims review determination instructions contain no definition for 
misunderstanding. In a recent letter to a Member of the House Agriculture 
Committee, the USDA stated: "... there is no definition or explanation of 
misunderstanding in the instructions. We do not feel a definition necessary 
to allow the caseworkers latitude in dealing with participants who are of varying 

levels of educational achievements and language skills. The difference between 
misrepresentation and misunderstanding is largely based on the intent of the 
recipient and not a specific set of circumstances; hence failure to report a 
household change could be either. The caseworker, who has had previous contact 
with the participant, is generally the best judge of the participant's intent." 

The distinction between deliberate misrepresentation on the part of a 
recipient or his honest misunderstanding of the program requirements therefore 
depends primarily upon the perception of the individual caseworker. 

To summarize, federal statistics on recipient fraud are based on the 
results of state agencies' reviews of cases of coupon over issuances and a 
determination by the state agency as to whether the overissuances were due to 
agency error, or recipient error as a result of deliberate misrepresentation, 
or a misunderstanding of the program requirements. 

There are no federal instructions or guidelines requiring the specific 
use of consistent or similar methods to identify overissuance cases by state 
agencies nationwide, and the USDA has no real idea of the actual parameters 
of the claims review determination process with respect to each state agency's 
effort to identify and review possible cases of coupon overissuance. 

Clearcut federal definitions between misrepresentation and misunderstanding 
are lacking, and the initial assessment of whether or not deliberate misrepre- 



545 

- 45 - 



sentation may be Involved in an overissuance case hinges on the perceptive 
talents of the caseworker. 

The federal statistics on claims review determinations for FY 1975 show 
wide state-to-state variations in the numbers of claims which are established, 
ranging from as few as one or two claims reported by some states, in comparison 
to 5,000 or more claims reported by other states. Part of the variations is 
due to the fact that not all claims which are established are required to be 
reported by the state agency to the Food and Nutrition Service. However, there 
is no way to determine to what extent this may account for the variations since 
USDA maintains no records on this. Another reason for the variations is the 
fact the statistics provided on claims review determinations by FNS do not reflect 
those claims which were reported to FNS, but which are determined to be 
uncollec table. For example, in FY 1975, FNS reported 34,463 claims totaling 
$6.3 million. An additional 2,984 claims, totaling $800,500, were deemed 
uncollec table. 

Nonetheless, the Department of Agriculture has observed that most States 
do not pursue claims vigorously enough to fully ascertain losses and liabilities 
for all improper coupon issuances. 

It should be noted that beginning in July 1976, FNS will require each state 
agency to provide a system for monitoring and improving its administration of the 
food stamp program, which will include state and local handling of claim 
determinations. For the time being, however, USDA cannot be certain of the actual 
level of recipient fraud, or how close current figures come to being representative 
of that level. 



546 



- 46 - 

In response to a question raised by a Member of the House Agriculture 
Committee during hearings on food stamps in February of this year, as to 
whether the Department knew the level of abuse by recipients and retailers, 
Assistant Secretary Richard Feltner stated: "I do not have any figures that 
are reliable enough to say this is what it is. In the past I have used the 
figure of something far less than one percent as a fraud rate. I do not think 
we know what the fraud rate is. The figures that I have given you in the past 
have been based on actual prosecuted cases where an individual was found 
guilty. I do not think the fraud rate is extremely high, but I have to tell 
you I do not think we know exactly what it is." 



547 



APPENDIX IX 

Survey of State Administrators on Illegal Activities 



549 



EDELA GARZA, Tlx 
JOSEPH P. VIOORfTO, P*. 
WALTER B. JONES, NC 
CO JONES. TCNN. 
JOHN MCLCHtH. MONT. 
DAWSON MATHIS, OA. 
BOB BERCLANO. MINN. 
GEORGE C. MOWN. JM., CAUP. 
DAVID R. BOW EN, MISS. 
CHARLF5 ROSE, NX. 
JERRY LITTON, MO. 
JOHN BRECKINRIDGE, KT. 
FREDERICK W. RICHMOND, N T. 



JAMES WEAVER. OREO. 
ALVIN BALOUS, WIS. 
JOHN KREBS, CAUP. 
TOM HARK IN, IOWA 
JACK HIOHTOWER, TEX. 
BERKLEY BEDELL, IOWA 
MATTHEW P. MC HUGH, N.T. 
GLENN ENGLISH, OK LA. 
PLOYTJ J. PITNIAN. I NO. 
JOHN W. jEwrm. JR., 14. 
NORMAN C O AMOURS. "X 
RAT THORNTON, ARK. 



Jfyou&t of Kepresentatibes 

Committee on Agriculture 

•Room 1301, TLongtoortfi Jfonst €>Uiu £»ufltrfng 

JtSarfjtngton, B.C. 20515 

December 23, 1975 




EDWARD R. MADIGAN. ILL. 
PETER A. PEYSER. N.T. 
MAMOARET M. HECKLER, MAS) 
JAMES M. JEPPOROS. VT. 
RICHARD KELLY. FLA. 
CHARLES E. GRASS LEY, IOWA 
TOM HAG E DOR N MINN. 



HYDE H, MURRAY, 



Dear 

During its food stamp study this year, the House 
Committee on Agriculture has received a great many of the food 
stamp survey questionnaires and Quality Control review forms 
that were requested of state and local welfare administrators 
throughout the Nation, and it is compiling the data obtained 
for the Committee's Food Stamp Study Report. I would like 
to express the Committee's sincere appreciation to you and 
others in your State who have contributed in this substantial 
way to our study of the Food Stamp Program. 

There are, however, two areas in which we would very 
much appreciate additional assistance. The first is the 
Quality Control process. An initial review of the returned 
questionnaires revealed that about 80 percent of the state 
level jurisdictions believe the error detection and reporting 
aspects of Quality Control should be improved. This finding 
gains in importance especially when viewed in perspective 
with the Department of Agriculture's most recent report on 
Quality Control findings covering the July-December, 1974, 
period and the attendant attention given that report. Also, 
the validity of the Committee's analysis of Quality Control 
reviews for the month of April, 1975, depends heavily on the 
degree to which the Quality Control process yields a meaning- 
ful data base on the characteristics of program participants. 
Roughly one-forth of the returned state questionnaires cited 
problems in sampling, overall statistical validity or other 
areas associated with the use of Quality Control reviews. As 
the States are in a unique position to evaluate these factors, 
we have prepared the attached supplementary questionnaire to 
obtain your specific views . 

Illegal program abuse is the other area for which 
additional detailed data and state views would be very help- 
ful. Current national estimates of illegal abuse of the Food 



550 



Stamp Program range from "practically nonexistent" to 
"widespread". The Committee feels that it is critical, in 
the context of meaningful reform, to present this issue in a 
true and accurate perspective. To further this effort, we 
have developed a second questionnaire on which your assistance 
would be very much appreciated. 

In the interest of time and the many other demands facing 
state and local welfare officials, we have limited both 
questionnaires to state-level viewpoints. We encourage you, 
however, to include any other material on state arid local 
views you may desire. 

We would be grateful if the attached questionnaires could 
be completed and returned to the Committee by January 30, 
1976, so that we may realize their full benefit in the consid- 
eration of major legislation affecting the Food Stamp Program. 
Please address your returns to: 

Mr. David L. Wright 

House Committee on Agriculture 

1301 Longworth House Office Building 

Washington, D.C. 20515 

If you have any questions, please contact Mr. Wright 
directly at telephone number 202-225-2171. Thank you very 
much for the contribution of your State to this important 
study. 

Sincerely , 



Thomas S. Foley 
Chairman 



TSFrdlw: jc 



551 



STATE FOOD STAMP QUESTIONNAIRE ON ILLEGAL ACTIVITIES 



A consequence of the dramatic expansion of the food stamp program 
has been the continuing problem of protecting program integrity and 
security. Important to the Committee's study will be a review of 
state/federal responsibilities and efforts in the detection, invest- 
igation and disposition of suspected cases of illegal activities 
in the food stamp program. We would appreciate your responses to 
the following questions to 1) further our understanding of how cases 
of illegal food stamp activities are handled at the state level; and 
2) how this compares with the handling of similar cases in other state- 
administered welfare programs, notably Aid to Families with Dependent 
Children (AFDC) , 



Directions ' — Please respond on the basis of the operation of the 
program in the geographic area for which you are responsible. 

A number of questions provide you the opportunity to explain your 
answer and to make recommendations for chanqes. If additional space 
is needed, please attach additional pages and identify by number the 
questions being answered. These explanations and recommendations will 
be given very careful consideration. 



Respondent Identification 

Name : 
Title: 
Office : 
Address: 
Telephone: 



552 



Legal Authority 

1. Are there any state statutes which a) enumerate certain actions 
as criminal or civil violations of the food stamp program or b) are 

used in the prosecution of food stamp violations? Yes No 

If "yes", please attach copies. 

2. Do comparable state statutes exist for the Aid to Families with 
Dependent Children Program? Yes No . 

3. Since the State Agency is responsible for the certification, 
issuance and claims review determination processes for the food 
stamp program within the State, does it provide state and/or local 
food stamp officers who work in these areas with any guidelines or 
instructions in the prevention or detection of illegal activities; or 
in the interpretation of distinctions between a "misunderstanding", 

a "misrepresentation" , and "fraud" by an applicant or recipient 
household? Yes N o If "yes", explain briefly. 



4. Has the adequacy of state statutory authority been an issue in 
efforts to prosecute criminal or civil violations of the food stamp 
program? Yes No If "yes", please explain briefly. 



5. Has there been adequate guidance and incentive (i.e., fiscal 
incentives, cost-sharing ratios, etc.) from the federal level to assist 

the State in the prevention and control of illegal activities? Yes 

No . If "no", please explain briefly. 



553 



Administrative Structure 

6. Are there any agencies, offices or appointed officials within the 
State specifically assigned the responsibility for the prevention, 
detection, investigation, prosecution, or other disposition, of 
suspected cases of illegal activities in the: 

a. AFDC Program: State Local None . 

b. Food Staitip Program: State Local None . 

c. General Relief (or Assistance) Program: State Local 

None 

d. Medicaid Program: State Local None . 

e. SSI Program: State Local None . 

f . Other: State Local None . 

(please specify! 



7, What was the amount of staff and funding allocated for the 
control of illegal activities in the AFDC and Food Stamp Programs 
during the fiscal year ending June 30, 1975? 

a. AFDC Program: Staff F unding . 

b. Food Stamp Program: Staff ^ Funding . 

8. Of the total staff, funding, and time devoted to the control of 
illegal activities in all welfare programs administered in your state, 
approximately what percentage of each was allocated for the AFDC 

and Food Stamp Programs during the fiscal year ending June 30, 1975? 

% Staff % Funding % Time 
a. AFDC: 



b. Food Stamp Program: 

c. All other welfare 
programs : 

d. Information not avail- 
able: 



9. Does the State Agency evaluate its efforts to prevent and 
control illegal activities overall and implement improvements in 
areas where it feels its efforts are weak? 

AFDC: Yes_ No . Food Stamp Program: Yes No 

If "yes", please explain briefly, 

a, AFDC: 



b. Food Stamp Program: 



10, If there are no agencies, offices or appointed officials at the 
state level who are specifically assigned the responsibility for 
handling illegal activities in the AFDC, Food Stamp and other welfare 
programs administered by the State, how are suspected cases of illegal 
activities detected and handled? 



554 



State and Local Relationship in the Identification of Suspected Cases 
of Illegal Activities. 

11. Does the State promulgate any policy with respect to priorities 
which may be assigned to the identification of suspected cases of 
illegal activities among the various state-administerea welfare 
programs? Yes _ No . If "yes", please explain briefly. 



12. For either the AFDC Program ot the Food Stamp Program, does the 
State promulgate any instructions of guidelines to State and/or 
local county employees for the identification of suspected 
occurrences of illegal activities? 

AFDC: Yes No . Food Stamp Program: Yes No 

If "yes", please explain briefly. 

a. AFDC: 

b. Food Stamp Program: 



13, What are the most common means by which suspected cases of illegal 
activities are identified? 

a . AFDC : 

b. Food Stamp Program: 

14. Is the identification of suspected cases of illegal activities: 
(please check) 

AFDC Food Stamp Program 

a, state level responsibility 

b. local, county level responsibility, 

subject to state supervision 



c. local, county level responsibility 

d. Other (please specify) 



15. Are local, county level offices required to report all suspected 
cases of illegal activities they have identified to the State Agency? 

AFDC Food Stamp Program 

a. Yes 

b. No 

c. under certain 
circumstances 



If "c", please explain briefly. 



555 



State and Local Relationship in the Investigation of Suspected Cases 
of Illegal Activities. 

16. Has the State established any policy or guidelines to which 
state and/or local personnel adhere in their investigations of 
suspected cases of illegal activities? 

AFDC: Yes No Food Stamp Program: Yes No . 

If "yes", please explain briefly. 

a. AFDC: 

b, Food Stamp Program: 



17. Once a suspected case of illegal activity has been detected, is 
the decision to investigate it (please check where appropriate) : 

AFDC Food Stamp Program 

a. state-level decision 

b. local, county-level 
perogative, subject 
to state approval or 

supervision 

c. local, county-level decision 

d. Other (please specify) 



18. Are local, county-level offices required to report the results of 
their investigations of suspected cases of illegal activities to the 
State Agency? 

(Please check wherever appropriate) : 

AFDC Food Stamp Program 

a. Yes 

b. No 

c. Under certain circumstances 
If "c", please explain briefly. 

1 ) AFDC : 



2) Food Stamp Program: 

State and Local Relationship in the Disposition of Suspected Cases of 
Illegal Activities 

19. Is the disposition of a suspected case of illegal activities 
(please check where appropriate) : 

AFDC Food Stamp Program 

a. state-level decision 

b. local, county-level 
perogative, subject 
to state approval or 
supervision 

c. local, county-level decision 

d. Other (please specify) 



75-969 O - 76 - 36 



556 



20. Approximately what percentage of the disposition of the cases of 
illegal activities: 

AFDC Food Stamp Program 

a. are administrative 

b. include judicial action ^ 



21. Where evidence exists to support suspected cases of fraud and/or 
misrepresentation by recipient households, what is the general 
likelihood of the following action for the majority of cases at the 
state and/or local levels: 



AFDC Program 




Prosecution 


Termination Restitution 
of Benefits Ordered 


No 

Action 


ALWAYS 
amounts 


under 
over 


$200 
$"200 








LIKELY 
amounts 


under 
over 


$200 
$"200 








UNLIKELY 
amounts 


under 
over 


$200 
$2u"0 








NEVER 
amounts 


under 
over 


$200 
$"2 0"0~ 








Food Stamp Program 




Termination Restitution 


No 








Prosecution 


of Benefits Ordered 


Action 


ALWAYS 
amounts 


under 
over 


$200 
$200 








LIKELY 
amounts 


under 
over 


$200 
$200 








UNLIKELY 
amounts 


under 
over 


$200 
$200 








NEVER 
amounts 


under 
over 


$200 
$200 








23. Plea 


se list any 


summaries or 


statistical reports which are 


pre- 



pared on a regular basis, related to suspected or actual illegal 
activities in the AFDC, Food Stamp or other welfare programs (include 
form number, if any; brief description; frequency of preparation; whether 
employed for internal use or communication to another authority) . 



557 



For the fiscal year ending June 3Q, 1975 , please provide following 
data. Please indicate where approximations are used: 

AFDC Food Stamps 

24. Number of cases of fraud or 
misrepresentation which were disposed 
of administratively because prosecution 
was declined or evidence did not warrant 
referral for criminal prosecution. 

a. Total monetary value of losses: 

b. Restitutions ordered :1) number 

2) $ value 

c. Collections declined:l) number 

2) $ value 

25. Number of prosecutions requested: 

26. Number of prosecutions: 

27. Number of convictions: 

a. Total monetary value: 

b. Restitutions ordered :1) number 

2) $ value 

c. Collections declined:l) number 

2) $ value 

d. Fines: 1) number 

2) $ value 

Data on Recipient Claim Determinations for Food Stamp Program only 
for Fiscal Year ending June 30, 1975. 

28. For recipient claim determinations, please explain briefly the 
manner in which the State Agency determines what cases to review for 
possible overissuances of bonus coupons, i.e., does State Agency establish 
a sampling technique or do such cases come from a variety of sources, 

the State Agency reviewing cases as they are brought to its attention. 
What was the total number of cases reviewed for the fiscal year ending 
June 30, 1975? 





29. What was the total number of cases of overissuances of bonus 
coupons due to recipient fraud or misrepresentation? 



30. How many recipient households were disqualified from program 
participation as a result of fraud or misrepresentation? 



31. How many recipient households were allowed to continue to be 
recertified for participation in the food stamp program, when 
the household or a -member of the household owes FNS an unpaid 
balance on a fraud claim? 



558 



32. Please provide any other numerical information for the fiscal 
year ending June 30, 1975, which you believe adds to the comprehensive- 
ness or better expresses illegal activities occurring in your state, 

or your efforts to control them. 

AF DC/Food Stamps 

a . 
b. 
c. 
d. 
e . 
f . 

33. Do you believe the data you have provided for this questionnaire 
adequately reflects the true level of illegal activities occurring in 
your State for the: 

A AFDC Program: Yes No . Food Stamp Program: Yes No . 

If "no", please provide any additional suggestions, data, or comments 



559 



W. R. POAOE. TEX.. 

VICE CHAIRMAN 
E DE LA CARTA. TEX. 
JOSEPH P. VIGOR1TO. PA. 
WALTER B. JONES. N.C. 
ED JONES. TENN. 
JOHN ME1XHER. MONT. 

BOB BERGLANO. MINN. 
GEORGE E. BROWN. JR.. CAI 
DAVID R. BOWEN. MISS. 
CHARLES ROSE, N.C. 
JERRY LITTON. MO. 
JOHN BRECKINRIDGE. KY. 
FREDERICK W. RICHMOND, 
RICHARD NOLAN, MINN. 
JAMES WEAVER. OREG. 
ALVIN BALDUS , WIS. 
JOHN KREBS. CALIF. 
TOM HARKIN, IOWA 
JACK HIGHTOWER, TEX. 
BERKLEY BEDELL. IOWA 
MATTHEW F. MC HUGH. N.Y 
GLENN ENGLISH, OK LA. 
FLOYD J. F1THIAN. IND. 



tyouse of ixfprcscntatibf s 

Committee on Agriculture 

•Room 1301. TLongtoortb J&oust (Office Sutlbing 

ton,©.C. 20515 



1 E. D AMOURS. 



August 26, 1976 

TO: Members, House Agriculture Committee 
FROM: Thomas S. Foley, Chairman 



MADIGAN. 



"tENSON MOORE. I 



SPECIAL 
'. EASLEY 



SUBJECT: Survey of State Administrators on 
Illegal Activities 



In December 1975, a questionnaire to obtain information and 
opinions from Food Stamp Administrators regarding their role in 
the prevention, detection and control of illegal activities in the 
Food Stamp Program was sent to the Directors of the Departments of 
Social Services in each of the fifty States, the District of 
Columbia, Guam, Puerto Rico and the Virgin Islands. All information 
was requested for fiscal year 1975. Data from four States were 
received too late to be included in the attached summary. 

State and local responsibility for the control of illegal 
activities in the Food Stamp Program primarily involves recipient 
violations, such as fraud, misrepresentation of income, household 
situation, dual participation or any other deviation from the 
eligibility requirements of the program. Only these recipient 
violations are addressed in the survey. 

Information was requested on state legal authority, administrative 
structures (staff and funding), and state and local relationships in 
priorities and control of abuses within the Food Stamp and other public 
assistance programs to determine state practices and procedures in 
prevention, identification and disposition of cases of illegal 
activities in the Food Stamp Program. 

Respondents were also asked to comment on the adequacy of Federal 
guidance and incentive in pursuing system abuses. An overwhelming 
84 percent of the states reported a total lack, of federal guidance 
and incentive in the development and implementation of a coordinated 
methodology for the control of illegal activities in the Food Stamp 
Program. This is clearly evidenced by the absence of reliable federal 
data on recipient abuse of the program on the national scale. 



560 



Of particular interest was the disposition of known cases of 
fraud and misrepresentation in the Food Stamp Program. In a 
majority of states, 90 percent or more of the cases of illegal 
activities are settled through administrative action rather than 
through court proceedings, which often means that no punitive 
action was taken, and in fact, repayment may not have occurred. 

Figures were sought in the area of case review for possible 
overissuance of coupons and the corresponding number of actual 
instances of coupon overissuance due to fraud and misrepresentation. 
Sufficient data exist only to compare the number of reviewed cases 
with the actual instances of overissuance in eighteen states. 
Less than five- thousandths of one percent of the total caseload of 
these eighteen states was reviewed for possible overissuance, 
revealing coupon overissuances directly due to fraud and misrepresen - 
tation in 51 percent of the cases . 



Attachment 



561 



ATTACHMENT A 



SURVEY OF STATE ADMINISTRATORS ON ILLEGAL ACTIVITIES 



A full 32% of respondents stated that they have no State statutes 
which enumerate criminal or civil violations, or that are used in the 
prosecution of Food Stamp violations. The remaining 68% reported that 
State statutory authority exists. The survey reflects a direct correlation 
between the lack of this statutory authority and the low rate of judicial 
disposition of Food Stamp violations. Many states indicated a general 
reluctance to prosecute violations because of overlapping Federal and State 
jurisdictions. 

In contrast, 947, of the respondents cited State statutes for the 
disposition of abuses of the Aid to Families with Dependent Children 
Program in which the States share from 17% to 50% of the benefit cost 
and reimbursement. 

Thirty-seven States provide some guidelines to Food Stamp personnel 
on the prevention and detection of illegal activities in the Food Stamp 
Program, while 267, issued no such instruction. Only one State reported 
a uniform policy with respect to control of illegal activities for all 
public assistance programs. 

An overwhelming majority, totaling 847,, of the respondents stated 
that there was not adequate guidance and incentive from the Federal level 
to assist the States in the prevention and control of illegal activities 
within the Food Stamp Program. Most respondents noted that little Federal 
assistance was given the States in the area of technical guidance in the 
prevention, detection and control of program abuse. The majority cited 
the cost to the State for recovering Federal monies in which they share 
no reimbursement, and which results in a 50% net loss of their expended 
resources as a significant disincentive to pursuing Food Stamp abuses. 

Responses indicate that 17 States have no staff or funding available 
specifically for the control of illegal activities in the Food Stamp Program, 
and 12 more reported staffs of less than 5 people for statewide control. 
Of the States who maintain a staff specially allocated to the control of 
illegal activities in the Food Stamp Program, only three reported 507, or 
more of this staff's time was expended on Food Stamp Program violations. 

It is apparent from the survey that there is no systematic method or 
coordinated effort employed at the Federal, State and Local levels in the 
prevention and detection of illegal abuses in the Food Stamp Program. 
Twenty percent of the respondents indicated that they exert no effort to 
evaluate the effectiveness of abuse controls within their Food Stamp Program. 
It is also evident from State responses that there is not adequate Federal 
guidance given the States concerning a methodology for detection of illegal 



562 



abuses. Only four States cited a case-by-case follow-up, review of 
fraud referrals, analysis of monthly statistics on prosecutable fraud, 
or other in-depth analysis of actual violations. Most of the States 
who indicated that they evaluated their Food Stamp Programs used 
secondary sources such as semi-annual, Department of Agriculture 
Quality Control Reports, State and Federal audits and other agency 
reports to conduct their evaluations. 

Seventy percent of the respondents indicated that the burden of 
responsibility for prevention and detection of illegal activities within 
the Food Stamp Program rests with the local administrative unit, even 
though the disposition of suspect cases remains within the purview of 
State officials. Lacking a uniform policy at the Federal/State levels 
for control, the certification worker often must rely on suspicions and 
the aid of public complaints to detect abuses in the system. 

A startling 71% of the respondents states that they issued no policy 
priorities for the identification of suspected cases of illegal activities 
among State-administered welfare programs. The remaining 29% had such 
a priority policy based only on known or recurring abuses rather than a 
systematic approach to possible violations. 

Redetermination of recipient eligibility and some form of income 
verification at the State level were cited as most beneficial in 
identifying suspected cases of system abuse. 

Twenty-six respondents disposed of more than 90% of their cases of 
illegal activities in the Food Stamp Program through administrative 
action, while only 13, half that number, indicated that more than 907» 
of their Aid to Families with Dependent Children Program cases were 
handled in this manner. This comparison supports the conclusion derived 
from the statements made by most of the respondents that the States are 
more diligent in their efforts to prosecute illegal abuses in the Aid to 
Families with Dependent Children Program because of the State cost-sharing 
ratio. For example: In a case of fraud within the Aid to Families with 
Dependent Children Program, the State sustains a loss of its contributed 
share of AFDC benefits, and if successfully prosecuted, may regain its 
full investment. However, the State sustains no direct loss of State monies 
in a case of fraud within the Food Stamp Program until the abuse is 
discovered and pursued at which time the State is guaranteed to spend, 
without reimbursement, 507 o of the cost of corrective procedure. 

States are not required to report on the abuses of the Food Stamp 
Program. States are required only to consult the Food and Nutrition 
Service of the Department of Agriculture on those cases of illegal 
activities where there is substantial evidence of violations in which 
judicial or administrative action is imminent. There is no consolidation 



563 



of information at the Federal level with regard to a systematic approach 
to dealing with abuses of the Food Stamp Program. There is no agglutination 
of successful methods of detection, identification of recurring abuses, 
types of illegal activities particularly prevalent in the Food Stamp 
Program or a general awareness of weaknesses in the system. 

Even though the majority of the respondents rely heavily on 
administrative disposition of their cases of abuse in both the Aid to 
Families with Dependent Children and the Food Stamp Programs, 41 
respondents did not have sufficient data to report the total dollar 
value of losses and restitutions ordered by the administrative action 
on their Aid to Families with Dependent Children cases, and 36 could not 
supply this information for their known cases of Food Stamp abuse. The 
15 respondents who supplied the amount of total dollar losses resulting 
from fraud and misrepresentation violations reported over $2,677,000 in 
defrauded funds during FY 75 from the Food Stamp Program alone. 

The 12 States who submitted complete data for FY 75 on the number of 
requests for prosecution for fraud and misrepresentation cases in the 
Food Stamp Program and the actual convictions obtained, reported 2,096 
requests for prosecution and a conviction in 646 of these cases. Nine 
of these States revealed varying levels of staff and funding specifically 
devoted to control of illegal activities in the Food Stamp Program. One 
State, it is interesting to note, with the highest level of funding and 
staff allocated to the abuse area showed the highest number of requests 
for prosecution and the highest conviction rate. It would appear that 
as resources are directed toward abuse, the volume of discovered illegal 
activities increases proportionately. 

When asked to indicate the number of cases actually reviewed for 
possible overissuance of Food Stamp coupons during FY 75, 21 respondents 
reported figures equaling an average of less than five- thousandths of 
one percent (.005) of their total caseload was reviewed for issuance error. 
There was an exception to this low rate of review. One respondent 
indicated that 12,230 cases, or 19% of its total caseload, were reviewed 
in FY 75. This respondent also stated that there had been zero dollar 
value loss, zero restitutions ordered, zero prosecutions, zero convictions 
and zero fines imposed, a remarkable achievement in contrast to the other 
respondents. Sufficient data exists only to compare 18 State reviews of 
cases for potential overissuance with the corresponding figures on actual 
cases of overissuance due to fraud and misrepresentation. Five- thousandths 
of one percent(23, 758 cases) of this group's total caseload(5, 836, 953) was 
reviewed, revealing that 51%(12,089 cases) of the recipients reviewed had 
received an overissuance directly due to fraud and misrepresentation. 

Nineteen respondents indicated that during FY 75, 3,200 households 
were disqualified from participation in the Food Stamp Program as a 
direct result of fraud and misrepresentation cases. One State noted, 
however, that it was prohibited by court injunction from disqualifying 
participants involved in cases of fraud. The general practice among the 



564 



States is to allow the households owing an unpaid balance on a fraud 
claim to continue to participate in the program, if they otherwise 
qualify, for a limited time period or continuously if the recipient 
makes regular payments on his outstanding debt. 



TWENTY-EIGHT STATES OFFERED COMMENTS AND CRITICISMS OF THE FOOD 
STAMP PROGRAM, SOME OF THEIR CONCERNS ARE QUOTED HERE: 

"WITH MORE INVESTIGATIVE PERSONNEL, OTHER ILLEGAL ACTS WOULD BE 
DISCOVERED. IT HAS BEEN THE EXPERIENCE THAT WHEN AN ELIGIBILITY 
WORKER HAS SOMEONE TO SUBMIT THE REPORTS TO, THEY TEND TO REPORT MORE, 
THEREBY PLACING TIGHTER CONTROL ON THE PROGRAM. PLAN ELIGIBILITY 
STANDARDS FROM THE FEDERAL LEVEL, DISTINGUISHING WHO IS ELIGIBLE AND 
WHO IS NOT." 

"BETTER AND MORE COMPLETE TRAINING IS REQUIRED FOR THE ELIGIBILITY 
WORKERS AND THEIR SUPERVISORS. AUDIT AND INVESTIGATIVE STAFFS NEED TO 
BE INCREASED." 

"A STANDARDIZED FEDERAL GUIDELINE AND FORM SHOULD BE PROVIDED." 

"IT IS IMPOSSIBLE TO TELL, EITHER BY ANALYSIS OF Q.C. REPORTS OR 
INTERNAL AUDITS, THOSE CASES (NUMBERS) THAT HAVE FAILED TO DISCLOSE 
PERTINENT INFORMATION. ALSO, A 1,200 CASE SAMPLE, OVER A SIX MONTH 
PERIOD, DOES NOT GIVE A CLEAR PICTURE OF RECIPIENT CASES BECAUSE OF 
LARGE NUMBER OF CASES IN THIS STATE." 

"THERE IS POSSIBLY A HIGHER INCIDENCE OF FRAUD AND MISREPRESENTATION 
THAN COMES TO THE ATTENTION OF THE AGENCY." 

"THE AVAILABLE DATA IS INCONCLUSIVE AS A MEASURE OF THE TRUE LEVEL 
OF ILLEGAL ACTIVITIES." 

"GENERAL LACK OF PROSECUTION EVIDENTLY ENCOURAGES FRAUD 

CONSEQUENTLY MOST CASES ARE HANDLED ADMINISTRATIVELY, i.e., THROUGH 
'PLEA 1 BARGAINING OR DISMISSED." 

"...SOME DATA CANNOT BE COLLECTED SINCE THE STATE DOES NOT HAVE 
STAFF AND FUNDS." 

"ACCURATE STATISTICS ARE NOT BEING MAINTAINED BY THE STATE AGENCY." 

"WE RECOMMEND THAT USDA DEVELOP A MODEL FRAUD CONTROL SYSTEM AND 
PROVIDE INCENTIVES TO STATES TO PURSUE ILLEGAL ACTIVITY IN THIS AREA." 

"WE HAVE INSUFFICIENT INVESTIGATIVE STAFF TO DO TIMELY, TN-DEPTH 
INVESTIGATION." 

"WE ARE UNABLE TO ACT ON A LEGAL BASIS BECAUSE THERE IS NO STATUTE..." 



565 



"A 'TRUE LEVEL' COULD NOT BE DETERMINED UNLESS EACH CASE WERE 
INVESTIGATED IN-DEPTH. COURT ACTION IS NOT USED AS A MEANS OF COLLECTION, 
SINCE THE TIME AND COSTS OF COURT ACTION RESULT ONLY IN PAYMENT TO USDA, 
WITH NOTHING AT THE LOCAL LEVEL. COUNTIES ARE NOT ENTHUSIASTIC ABOUT 
ACTING AS PROSECUTING AGENTS FOR THE FEDERAL GOVERNMENT." 

"... WE DO NOT BELIEVE THE AVAILABLE DATA GIVES A COMPREHENSIVE 
PICTURE OF ILLEGAL ACTIVITIES IN THE STATE FOR THE FOOD STAMP PROGRAM." 

"... IS ENGAGED IN DISCLOSING ILLEGAL ACTIVITIES IN NON-ASSISTANCE 
FOOD STAMP PROGRAM IN: 1) COLLEGE STUDENT POPULATION AND 2) MIGRATORY 
WORKERS . " 

"SIMPLIFY THE FOOD STAMP PROGRAM OR ABANDON IT ENTIRELY." 

"FOOD STAMP REGULATIONS ON RECOVERY ARE TOO COMPLEX. BONUS VALUE 
OF COUPONS IS FEDERAL MONEY. NEW REGULATIONS ALLOWING DEDUCTIONS OF 
ILLEGAL PAYMENTS FROM FUTURE BONUSES OR INCREASING PURCHASE PRICE IS A 
HELP IN RECOVERY." 

"FROM THE QUESTIONNAIRE, YOU COULD EASILY GAIN THE IMPRESSION THAT 
WE ARE 'SOFT' ON FRAUD. THIS IS NOT THE CASE. ...WE USE THEM VERY 
LITTLE IN FOOD STAMPS FOR THE SIMPLE REASON THAT NONE OF THE RECOVERIES 

IN OR REDUCTION OF FRAUD IN FOOD STAMPS DIRECTLY BENEFIT THE STATE 

... IF FEDERAL OFFICIALS WON"T ACT TO SAVE FEDERAL DOLLARS, YOU CAN SEE 
HOW IT IS DIFFICULT TO GET STATE LEGISLATORS AND DISTRICT ATTORNEYS TO 
INVEST THEIR MONEY TO SAVE FEDERAL DOLLARS." 

"...SOME INCIDENCE OF FRAUD (SUCH AS SALE OF COUPONS) WILL REMAIN 
UNDETECTED DESPITE ANY ADMINISTRATIVE EFFORTS TO MONITOR CLIENTS' 
BEHAVIOR." 

"THE INVESTIGATIVE DIVISION ON ILLEGAL ABUSE OR MISUSE OF COUPONS 
NEEDS FISCAL INCENTIVE TO BE ABLE TO ESTABLISH THE MECHANISMS AND 
PROCEDURES FOR PREVENTION, DETECTION, CONTROL, CORRECTION AND PROSECUTION 
OF CASES INVOLVED." 



CONCLUSION 

THIS SURVEY REVEALED AN ABSOLUTE DEFICIENCY IN COORDINATED EFFORTS 
TO IDENTIFY, PREVENT, DETECT AND CONTROL ABUSES OF THE FOOD STAMP PROGRAM. 
UNCLEAR JURISDICTIONAL GUIDELINES, THE ABSENCE OF DATA ON ACTUAL AND 
SUSPECTED ILLEGAL ACTIVITIES AND THE MONETARY DISINCENTIVE TO PROSECUTING 
VIOLATORS HAVE COMBINED TO BESTOW ON THE FOOD STAMP PROGRAM AN AURA OF 
QUIXOTIC ENDEAVOR. 

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